Market News

Dairy markets drift lower

Cash cheese held steady while butter, nonfat dry milk and Class III futures were all lower on the Chicago Mercantile Exchange on Tuesday. There were 16 loads of butter sold pulling the price down 3 cents just one day after 16 loads sold pushed the price 8.5 cents higher.

 

The Global Dairy Trade auction on Tuesday saw an overall increase of 1.1 percent. This is the sixth consecutive increase at the auction and the highest the index has been since last July.

On Tuesday, increases in cheddar cheese, butter, butter milk powder and skim milk powder more than offset declines in anhydrous milkfat, rennet casein and whole milk powder. No lactose ore sweet whey powder was offered for sale.

There were 22,094 metric tons sold on Tuesday which is 800 less than offered at the February 17^th sale.  Many had expected an increase after Fonterra announced last week it was going to offer more product at the auction.  The New Zealand dairy giant had cut offerings in January for fear they would not be able to meet existing commitments due to drought-related milk production declines on the South Island.

HighGround Dairy says it appears the dairy markets have now factored-in the decline in New Zealand milk production as the drought continues. Rainfall was about normal across New Zealand in February but that is not going to replenish soil moisture and pastures.  Dairy producers are drying cows off ahead of schedule as the end of the milk season nears.  Meanwhile production is expected to increase in the Northern Hemisphere as spring approaches.