Prices at Fonterra’s global dairy trade auction price crept higher again this week.
However, the New Zealand dairy industry leader says it will increase the amount of products it offers in the auction, over the next few months.
That may put pressure on the auction price.
But Fonterra still predicts a 3% reduced milk supply this year, because of very dry conditions.
Auction prices rose 1.1% this week, driven by a big jump in cheddar and butter milk powder prices.
The auction price index is now at its highest level since July.
Meanwhile, a price increase for farmers supplying the Dutch-based Friesland Campina, one of the world’s five largest dairy companies, points to price recovery in Europe too.
It has added €1.25 per 100 kg to its forecast milk price.
Slowing milk output growth in New Zealand and the EU (1.3% back in December, 2014, compared to 2013), and the extension of private storage aid for butter and skimmed milk powder to the end of September, have helped to boost EU markets. Storage of nearly 44,000t of butter and 21,000t of powder has already been aided.
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