Dairy prices rally at latest global auction amid threat of El Niño disruption
Record temperatures in Europe and the prospect of months of El Niño-related disruption in the Southern Hemisphere could impact supply, expert says.
The latest Global Dairy Trade auction saw milk prices rally, with the average price surging almost 2.3 percent to US$3873 (NZ$6597). This marked a notable increase from the 0.1 percent rise observed two weeks prior. Analyst Rosalind Crickett from New Zealand Exchange attributed the bullish trend to various factors. She noted that while global milk production remained strong, record-high temperatures in the Northern Hemisphere and the potential emergence of the strongest El Niño weather on record in the Southern Hemisphere could disrupt supply dynamics.
The important whole-milk powder price climbed 3 percent to US$3591 (NZ$6116), while skim milk powder rose 7.6 percent, nearing 12-month highs seen in May. Despite the positive outlook, farmers in Europe and the US are already bracing for winter feed shortages due to drought conditions. Butter prices fell by 2 percent, and anhydrous milk fat decreased by 6 percent, primarily due to abundant global supply of milk fats.
The upcoming release of New Zealand milk production figures on Thursday is expected to further validate the year-on-year growth story.
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