Further signs that supply and demand in dairy markets might be moving into better balance emerged on Monday, when New Zealand processing giant Fonterra increased its farmgate milk price forecast for the 2023/2024 season to between $6.50 and $8 per kg of milk solids.
The price converts to a mid-point of 26.58c/l, up 1.83c/l on the forecast made in late August.
Announcing the revised price, Fonterra pointed to recent increases in demand at the GDT auction, as well as milk collections that are expected to be slightly down on the previous year.
Closer to home, improvements in dairy commodity markets have resulted in the milk price indicator (MPI) published by the Ulster Farmers’ Union recording its largest increase in 14 months – a 1.14p/l rise to 32.53p/l. The latest increase is the third in a row for the MPI.
Since late August, prices for butter and milk powder have slowly increased at both GDT and weekly Dutch Dairy Board (DDB) auctions.
The Dutch auction has seen butter rising by €400/t, with whole milk powder up €160/t and skim milk powder rising by almost €300/t.
Year on year
While butter is still down €2,000/t year on year, with powder down €1,500/t, the recent run of improved market demand increases the pressure on processors to provide greater price stability this autumn.
This time last year, prices were heading for 50p/l.
Meanwhile, local processors have confirmed that winter bonuses will replicate those paid in previous years. That means Dale Farm and Leprino Foods will pay an additional 2p/l for milk supplied in October, November and December.
Lakeland Dairies will pay its traditional 3p/l bonus in November and December, while Aurivo will pay 2p/l over the four months from October to January.
Tirlán pays a 1.5p/l bonus for the four months running from November to February, with Strathroy paying an additional 1p/l for five months from October to February.