Auction prices for whole milk powder rises to highest in three months

WHOLE milk powder auction prices rose to the highest in more than three months, according to Fonterra Cooperative Group Ltd, the world’s largest dairy exporter.

Powder for March delivery gained 1.1% from two weeks earlier, according to a trade-weighted price index calculated the company’s latest GlobalDairyTrade auction. The average price rose to $3,637 (€2,723) a ton, the highest for the spot contract since September 15.

Prices began rising last month, as New Zealand declared medium-level droughts in Northland and in the Waikato province, which is the nation’s biggest milk-producing region. On December 10, Fonterra, which accounts for about 40% of the global trade in butter, milk powder and cheese, raised its forecast payment to farmers by 4.5% citing international prices.

Fonterra sells whole and skim milk powder and dried milk fat at its fortnightly internet-based auctions. It offers one- month contracts with delivery starting two months after the sale, and two three-month contracts with delivery starting three and six months later.

Whole milk powder for delivery from April through June rose 5.6%, Fonterra said. Powder for shipment from July through September rose 10.3%. Across all contracts, prices gained 3.8%. The winning first-contract price for regular New Zealand whole milk powder, which is the reference point for NZX Ltd’s futures contract, rose to $3,620.