Whole Milk Powder Gains at Auction to Highest in Two Months

July 3, 2013 05:50 AM

Powder for delivery across all contracts through January averages $4,757 a metric ton.

Matthew Brockett

Whole milk powder auction prices rose to the highest in more than two months, according to Fonterra Cooperative Group Ltd.

Powder for delivery across all contracts through January rose 0.1 percent, according to a trade-weighted index posted on Fonterra’s GlobalDairyTrade website. The average winning price climbed to $4,757 a metric ton, the highest since April 16, from $4,668 at the last auction two weeks ago.

Fonterra expects about 2 percent growth in New Zealand milk collection in the 2013-14 season, it said in a June 10 statement. Slowing global milk supply suggests powder prices across all contracts will remain around current levels until the end of the year, Chief Executive Officer Theo Spierings said in a May 29 interview.

Prices surged to a record in April as a drought across New Zealand’s entire North Island including Waikato province, the country’s biggest milk producer, curbed collection.

Fonterra said May 29 it expects to pay its farmers NZ$7 ($5.42) a kilogram of milksolids in the 2013-14 season, up from NZ$5.80 in the season that ended May 31.

Fonterra, which accounts for about a third of the global trade in dairy products, sells whole, skim and butter-milk powder, dried-milk fat, lactose, butter, cheese and casein at its GlobalDairyTrade auctions. Casein is a protein found in milk. Prices across all products rose 0.7 percent.

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