Slight rise in GDT dairy price index
An increase in the price of whole milk powder led to a rise in the overall dairy price index at last night's global commodity auction.
The GlobalDairyTrade's trade-weighted price index overnight rose 0.5 per cent compared with the last sale two weeks ago.
The average winning price was up to US$5042 (NZ$6150) a tonne from US$5025 (NZ$6048) a tonne.
Maximum supply, the measure of how much product is for sale, dropped from 41,338 tonnes to 36,098 tonnes, with a total of 35,399 tonnes sold.
The rise followed a 1.4 per cent lift in the dairy commodity price index at the last auction.
ANZ senior foreign exchange manager Sam Tuck said whole milk powder, the biggest category by volume, drove the index gain.
Whole milk powder was up 1.4 per cent and future supply contracts to June maintained high prices, which was an "encouraging sign", Tuck said.
Northern hemisphere production increased around that time, which could cause a drop in value but prices seemed to be holding.
Supply was a bit lower at last night's auction but it was not abnormally low and was not the main driver of the price increase, he said.
In last night's auction two of the nine product categories rose, while skim milk powder was unchanged. Butter led the gainers, up 2.6 per cent, followed by whole milk powder.
However, cheddar fell 4.3 per cent and rennet casein was down 3.7 per cent after posting recent gains that had helped reduce the price gap between the price of milk powder and other commodities.
Last night 185 bidders took part in the auction, with 124 winning bidders, and 788 qualified to bid. American company Land O'Lakes would begin offering skim milk powder on the online auction from March 4.
Land O'Lakes said it also planned to offer butter via the platform later in the year.
GlobalDairyTrade is owned by Fonterra, with Fonterra products representing 89 per cent of the product sold in the fortnightly auction.
US, Australian, Indian, European and Scandinavian dairy companies also sell their products on the independent platform.