After spending the last two months in negative territory, global dairy prices surged forward in the latest Fonterra Global Dairy Trade auction on Sep. 15. On decent volume of 33,791 MT of products offered, prices across the complex moved up 3.6 percent, the best result since July and second-best auction returns for the year.
Core commodity prices were the biggest gainers, with anhydrous milkfat up 2.0 percent, whole milk powder up 3.2 percent, and SMP (skim milk powder) seeing the biggest gain of 8.4 percent. This last result is perhaps the most significant as SMP s the single biggest commoditized dairy product in the world. Perhaps the price gains are evidence that the global economy is finally getting back on its feet and beginning its return to pre-COVID-19 levels.
What makes the auction event more interesting is that New Zealand is quickly coming into its flush and the season with its heaviest milk deliveries. However, the heavier milk volumes did not seem to weigh on product prices.