In the last week, futures prices for whole milk powder (WMP) have continued to rise, with September, October and November contracts for WMP lifting a further 5% since last Monday.
WMP futures have now risen by more than 10% in the last fortnight, which is a positive signal ahead of the scheduled GDT auction later today (Tuesday). Although the result from the last GDT auction was flat, the average selling price of WMP did lift 2% to $2,080/t.
While this price is a long way off where milk powder prices need to be, there are signs starting to emerge in the market that milk powders may be in the very early stages of recovery.
In its latest report on the global dairy market, the US Department of Agriculture (USDA) said milk powder prices may finally be recovering. Although they remain weak overall, whole milk powder prices have shown modest but steady improvement since February, primarily due to improved import demand from China.
On the skimmed milk powder side, market prices remain weak and close to intervention levels but have improved 11% since early May.
The USDA says these recent increases in milk powder prices are the first sign of a “realignment of markets that are slowly coming into balance as the milk over-supply situation is corrected.”
The USDA did warn that world prices for SMP are likely to remain challenged for the rest of the year as massive overhanging stocks in both the US and in intervention storage in the EU mitigate any real price recovery.
“While prices may trend upwards for the balance of the year, this progress will probably be unsteady and will likely be hampered by the substantial stocks of SMP. Any significant recovery (in milk powder prices) appears unlikely until well into 2017,” said the USDA.
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Dairy trends: Milk powder prices may be in early stages of recovery - USDA
A world drowning in a sea of milk – trying to stop a ripple becoming a tsunami
In the last week, futures prices for whole milk powder (WMP) have continued to rise, with September, October and November contracts for WMP lifting a further 5% since last Monday.
WMP futures have now risen by more than 10% in the last fortnight, which is a positive signal ahead of the scheduled GDT auction later today (Tuesday). Although the result from the last GDT auction was flat, the average selling price of WMP did lift 2% to $2,080/t.
While this price is a long way off where milk powder prices need to be, there are signs starting to emerge in the market that milk powders may be in the very early stages of recovery.
In its latest report on the global dairy market, the US Department of Agriculture (USDA) said milk powder prices may finally be recovering. Although they remain weak overall, whole milk powder prices have shown modest but steady improvement since February, primarily due to improved import demand from China.
On the skimmed milk powder side, market prices remain weak and close to intervention levels but have improved 11% since early May.
The USDA says these recent increases in milk powder prices are the first sign of a “realignment of markets that are slowly coming into balance as the milk over-supply situation is corrected.”
The USDA did warn that world prices for SMP are likely to remain challenged for the rest of the year as massive overhanging stocks in both the US and in intervention storage in the EU mitigate any real price recovery.
“While prices may trend upwards for the balance of the year, this progress will probably be unsteady and will likely be hampered by the substantial stocks of SMP. Any significant recovery (in milk powder prices) appears unlikely until well into 2017,” said the USDA.
Read more
Dairy trends: Milk powder prices may be in early stages of recovery - USDA
A world drowning in a sea of milk – trying to stop a ripple becoming a tsunami
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