New Zealand dairy: Out like a lamb, in like a lion
Three weeks ago, in the heaviest time of the year for milk deliveries and production, the Global Dairy Trade auction registered broad-based weakness across the dairy complex. Prices in most categories fell just over 5 percent at that event as heavy volumes and lower buying interest over the holidays may have led to price weakness.
However, one week into the new year, buying interest seems rekindled as prospects for global economic growth in 2020 have improved. Product prices surged by some 2.8 percent in the Jan. 7 event, led by solid gains in core commodities like skim milk powder, whole milk powder, and anhydrous milkfat.
Strength in protein pricing was particularly strong, with rennet casein up 8.6 percent and skim milk powder up 5.4 percent, continuing a bullish trend that began in 2019. Butterfat bucked its trend later in 2019 with gains in butter (up 3.7 percent), anhydrous milkfat (up 2.3 percent), and cheddar cheese (up 3.7 percent).
New Zealand will likely have less competition from neighboring Australia for regional exports given the devasting wildfires and their impact on the Aussie milk shed.
Fonterra GDT auction results
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