Archive: Powder prices show signs of settling at latest Fonterra Auction

Published 18 December 13

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The average price for WMP fell at this week’s Fonterra auction, keeping the overall auction index at just 0.2% despite large increases in prices for butter and fats.

Butter saw a 7.9% rise in the average price from the last auction, driven primarily by price increases on contracts for spring delivery, when milk supplies are at their lowest in Oceania. Adding further upward pressure to butter prices is the continuing strong demand for powders which is supporting high price levels. This continues to divert milk towards powders over fats, leaving less of these products available as a result. Although the price of WMP fell 1.5% at the latest auction this is more likely due to markets starting to rebalance from the highs seen recently. SMP closed with an overall average increase of 1.7%.

This was the first time British product was sold at the auction – SMP offered by Arla.  It achieved an average selling price of $4,695/tonne (£2,880/tonne), which compares to $4,750/tonne achieved for NZ product of a similar grade.