Following the latest Global Dairy Trade (GDT) auction overnight, Dairy analyst Stu Davison joins Dom George with an analysis of the 2.8% overall value increase since GDT 352.
Cheddar (CHED) was the biggest mover, increasing by 4.1% followed by Whole Milk Powder (WMP), up 3.4% and Butter up 3.1%. Anhydrous Milk Fat (AMF) was also up 2.3% while Skim Milk Powder (SMP) saw the smallest increase at 1.4%.
Davison provides insights into the implications of this positive shift for New Zealand's economy, particularly emphasising the influence of whole and skim milk powder prices.
"2.8% is good. [It] puts us back to where we were at the end of February and sort of erases a lot of those losses we made through March."
Davison also explains Fonterra's strategic adjustments to its offer curve in response to the season's milk production and how these decisions could potentially affect future market trends. He highlights that current low product volumes in the auction are "about 27% lighter than this time last year," suggesting that this scarcity may support higher prices.
The discussion then transitions to the potential impact of the US bird flu outbreak on milk production and consumer perceptions, with Davison remarking that the situation is akin to the early days of COVID-19 in terms of its potential to escalate.
Furthermore, the episode delves into the diversity of global buyers participating in the dairy trade. Davison observes that "this one was the majority of the product went to China," but also points out the significant activity from Southeast Asia and the Middle East in the market.
The conversation between the host and Stu Davison weaves together a narrative of dairy economics and military might, providing listeners with a rich and informative dialogue on current global trends in trade and defence.
Listen to the full chat between Stu Davison and Dominic George above.
To check out more episodes listen to the REX Podcast anytime on your favourite streaming platforms including Spotify, Apple Music and Rova or tune in to REX Mornings live on Magic from 5 am to 6 am every weekday.
Visit the Rural Exchange Facebook or Instagram page for more information and regular updates from the REX team.
