Milk up and down

globalDairyTrade was down 13.7% this morning with all products, AMF, Whole Milk Powder and Skim Milk Powder down.  According to van der Hayden of Fonterra the market has moved as a result of "increased supply".

With these prices speculation of a milk payout of $8/kgMS is out the window - but they were never realistic.  One would expect that the outlook for the season will be defined in the coming two to three months - with relatively strong demand the GDT prices look to be value for money to us at MyFarm.

Of interest is that the trade involved the largest number of successful bidders - 111 of of the 115 participants were successful purchasers.  A good thing probably for the success of the trading desk.

One result won't affect MyFarm's forecasts for 2010/11 for a payout in the high $6/kgMS but the effect on confidence and the NZ economy will be interesting to watch.  Recent economic data has been relatively weak - perhaps there won't be an interest rate rise in July?