The Global Dairy Trade (GDT) auction which best represents what whole milk powder (WMP) is making on international markets lifted again this week in the first auction of the new year.
Remember, there was a slight fall at the last auction in 2021, so this result reinforces the trade in dairy commodities, especially powders.
The average result was only up a fraction (+0.3%). However, this is better than the 1.5% drop recorded in the pre-Christmas week auction.
The Ornua Purchase Price Index (PPI) for December was also released this week. Again, the result was positive, reflecting the positive sentiment all summer and into the autumn.
The Ornua PPI for December is 135.5 (39.4c/l ex-VAT or 41.6c/l incl VAT) based on Ornua’s product purchase mix and assumed member processing costs of 7c/l and excluding member margin) and is up from 131.9 in the previous month.
When you add in the value added piece to get the all-in milk price which farmers should compare to the ex-VAT milk price in leagues, it comes to 42.65c/l ex-VAT at base solids or 45.03c/l incl VAT at base solids.
The November league was 36.8c/l ex-VAT at base solids.
The main global dairy traders are just coming back to the market this week as the holidays are finishing up.
A better handle on commodity prices for the first few weeks of the new year will be established next week to reflect what is happening with COVID restrictions around the world and its impact on food service, dining out and retail sales. The first indications are still quite positive that demand is holding.