Tridge summary
In June 2024, Oceania witnessed a historic high in spot butter prices, reaching over US$7,000/tonne, before experiencing a 10% drop to around US$6,546/MT in the latest Global Dairy Trade event. This surge is attributed to a combination of increased demand for dairy fat and cream products, sluggish milk supply growth in the Northern hemisphere, and a decrease in inventory. This situation benefits New Zealand farmers as butter prices, a key factor in Fonterra's milk price calculation, are essential for their profitability.
Additionally, the agricultural sector is experiencing positive trends in beef and lamb exports, with beef average export values hitting a high of $9.44/kg in May 2024, driven by demand from the United States and Japan. Meanwhile, lamb export values in May were $10.42/kg FOB, the highest since September/October 2023, with the European Union-27 and the United Kingdom showing a significant increase in lamb imports. Despite challenges such as higher urea prices due to China's export restrictions and logistical issues leading to increased container shipping rates, the outlook for farmgate prices remains strong, underpinned by robust demand in key markets.
Additionally, the agricultural sector is experiencing positive trends in beef and lamb exports, with beef average export values hitting a high of $9.44/kg in May 2024, driven by demand from the United States and Japan. Meanwhile, lamb export values in May were $10.42/kg FOB, the highest since September/October 2023, with the European Union-27 and the United Kingdom showing a significant increase in lamb imports. Despite challenges such as higher urea prices due to China's export restrictions and logistical issues leading to increased container shipping rates, the outlook for farmgate prices remains strong, underpinned by robust demand in key markets.
Disclaimer:The above summary was generated by Tridge's proprietary AI model for informational purposes.
Original content
The Oceania spot butter price hit a record high in June 2024 surging past US$7,000/tonne for the first time. However, the latest Global Dairy Trade saw a 10% drop and prices are now around US$6,546/MT. Behind these soaring butter prices is a combination of supply and demand fundamentals for dairy fat and cream. Sluggish milk supply growth in the Northern hemisphere during the seasonal flush is limiting surplus milk available for manufacturing. New Zealand is now into its milk production hiatus, helping to curb supply in the short term. Inventories in international supply chains are not excessive, leaving spot purchasing vulnerable. Furthermore, there is a seasonal increase in demand for fat products, like ice creams, in the northern hemisphere at this time of the year. Butter pricing is outperforming the broader dairy complex. In June 2024, spot prices (in USD terms) for the other main dairy commodities were flat to slightly higher. Skim milk powder is particularly languishing ...
Source: Ruralnewsgroup
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