Milk Commodity Prices May 28, 2013 12:00 am Commodity milk prices remain at high levels, although the upwards trend of the last few months has taken a ‘pause’ in May. On the global Fonterra auction the overall price for the two events this month saw average weighted prices fall back by around 9% compared to April. However, prices are still some 74% higher than 12 months ago (the latest weighted average price is $4,549 per tonne). Closer to home, we have previously reported (see March Bulletin) that the Northern Irish United Dairy Farmers auction was ceasing. But their new selling system seems to be delivering good returns on the back of strong commodity prices. It is reported that the price for April deliveries rose a massive 3.13ppl (to 31.22ppl) from the previous month. Commodity markets continue to be buoyed by strong demand and limited supply. The latter is a result of a low ‘spring peak’ in Europe caused by poor weather and high costs. The same cost issues are depressing US output, and New Zealand production continues to see the effects of the drought (although rains have now arrived in most parts). It is widely forecast that global production will pick up later in the year and this could see prices start to weaken.
