20 Sep 2017

Butter pushes global dairy prices up

10:00 am on 20 September 2017

Prices have risen slightly in the global dairy auction overnight, where milkfat products continue to be the star performers.

The average price rose 0.9 percent to $US3368 a tonne.

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Photo: 123RF

It follows a small rise a fortnight ago and is in line with steady price trends for the past three months.

The view that butter is no longer considered unhealthy is driving up demand and resulting in a global shortage of butter.

The shortage is good news for the market, where butter prices have risen by 1.2 percent to a new record of $US6026 a tonne, and the price of a 500g block of butter is also at a record high, reaching $5.39.

The strong butter prices are helping to drive global milk prices up, which is expected to put more money in farmers' pockets, and into the economy.

Overall there was 34,117 tonnes of product traded at the September 19 GDT, 1.8 percent more volume than at the previous event.

The important whole milk powder price rose 0.6 percent to $US3122 a tonne.

AgriHQ said the volume of whole milk powder (WMP) on sale at the auction was a unexpected.

"Overall there was 18,250 tonnes of WMP available at last night's event with the quantity of WMP trading at its highest level in the past 11 months.

"It was surprising to see more product added to the auction given the weak start to New Zealand's milk production season."

Data released yesterday by the Dairy Companies Association of NZ revealed August milk intakes were down 1.5 percent when measured on a milksolids basis.

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