Despite a near 2% drop in the average selling price of whole milk powder (WMP) at last week’s GDT auction, the futures market for WMP in New Zealand has held relatively firm over the last week. Prices for July, August and September contracts of WMP were back less than 1% on the NZX derivatives market in the wake of the GDT and continue to hover around the $2,250/t mark.

Accounting for the bulk of milk utilisation in New Zealand, WMP prices have a significant say on farmgate returns and are the driver behind the GDT index.

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The drop in WMP prices at the most recent GDT auction was attributed to reports from New Zealand that milk production has proved more resilient this year, despite an expectation from markets for a significant drop-off.

Fine weather and timely rainfall led to good grass availability in New Zealand at the end of its summer season and helped support milk production.

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