17 Jun 2014
TREND CHANGE IN GDT A SIGN THAT MARKETS ARE BOTTOMING OUTDairy
IFA National Dairy Committee Chairman Sean O’Leary said today’s 0.9% increase in the GDT weighted average price, after 8 consecutive negative results, reflected a positive change of trend and should boost market sentiment. Many of the internationally traded commodities have rallied today, and this is yet a further sign that dairy markets are stabilising and bottoming out.
“This week’s auction is seeing a strong recovery in the price of WMP – the commodity which makes up the largest quantities traded through the auction – which is lifting by 2.4%. There is also a good lift in Rennet Casein prices of 4.6%, a 1.8% increase in the price of butter, and 2.4% for Cheddar cheese. Butter milk powder is up a massive 17%. SMP is pretty much unchanged at just -0.2%, while anhydrous milk fat (butteroil) is the only product recording a negative price evolution of -3.8%,” Mr O’Leary said.
“While Arla and Euroserum are the only European operators trading on the GDT platform, I expect today’s results to be yet another illustration of the bottoming out of international markets, and I further expect that it will improve sentiments all around,” he said.
“Market returns have fallen from record highs earlier this year, but I would urge co-ops to proceed very cautiously when deciding on milk prices. Farmers did not benefit from all of last year’s accumulated profits, so co-ops must be careful to not go too far with price adjustments this year when markets are more than likely bottoming out and could be recovering soon,” he concluded.