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Skim milk powder prices weaken ahead of US sales


images (10) Prices of skim milk powder returned to a downward trend, hitting a 2011 low, at globalDairyTrade’s latest auction in a poor harbinger for the platform’s first sales of US product in a "coming of age".

The average price of skim milk powder – which rose at the last auction, on September 6, for the first time in three months – reverted to losses this time, falling 6.2% to $3,230 a tonne.

The price was the lowest since December, and took to 26% the product’s decline from a June peak.

And it come two weeks before globalDairyTrade, which has thus far sold product only from its parent, New Zealand’s Fonterra, makes its first sales of skim milk powder sold by US-based DairyAmerica.

The next auction, on October 4, will offer DairyAmerica low-heat and medium-heat powder, which globalDairyTrade said were "suitable for import into a large number of countries".

Indeed, DairyAmerica, the largest US supplier of skim milk and whole milk powder, has trumpeted the sales through globalDairyTrade as marking a "coming of age" for its export business.

The desire for exports comes in the face of a weak domestic market, with US fluid milk consumption on track for a 25-year low, according to the Milk Producers’ Council.

Milk fat tumble

The drop in globalDairyTrade slim milk powder prices contrasted with an uptick in whole milk powder prices, which rose for the first time since June, adding 1.0% to an average of $3,345 a tonne.

Prices for distant delivery were particularly firm, rising by nearly 2.7%, increasing their premium over nearer-term contracts, having stood at a discount until three months ago.

"Whole milk powder prices continue to show an upward sloping price curve," analysts at New Zealand-based Agrifax said.

However, the overall globalDairyTrade index fell 2.1%, dragged lower by an 11.2% slide in prices of anhydrous milk fat, a milk processing byproduct used by bakers and ice cream makers.

http://www.agrimoney.com/news/skim-milk-powder-prices-weaken-ahead-of-us-sales–3627.html

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