Fonterra’s Feb. 19 Global Dairy Trade auction for dairy products registered its sixth consecutive increase in prices across a broad range of products. Prices continue to trend higher after their early December reversal. Functional dairy protein exhibited strength with a 2.8 percent increase in skim milk powder and a 2.7 percent increase in rennet casein pricing. After a good start to the season and early rains, weather conditions have turned drier over the past 30 days, particularly across New Zealand’s North Island.
Though North America is approaching the start of its spring flush, we have seen a similar rise in pricing for nonfat dry milk across CME contracts. Global economic growth in 2019 remains the focus of most analyst forecasts. Obviously, slower growth for China’s GDP could stall further gains in prices as demand cools. The challenge for U.S. markets will be absorbing seasonal production and stocks in the face of trade uncertainties with China and the possibility of slowing economic growth.
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