Last night’s globalDairyTrade auction resulted in a lift in the whole milk price to $US2301 per tonne – an increase of 25.8%
That’s a very welcome change to the downward trend since March but Fonterra chair Henry Van der Hayden isn’t breaking out the champagne yet.
In an email to farmers he says while it’s great to see the lift, it’s difficult to know where the market’s going.
The dollar which is trading above 65 cents continues to cause concern and the US has increased its support price for skim milk by 15%.
The next globalDairyTrade auction is scheduled for September 1.
UPDATE: Bernard Hickey notes the improved price has taken the dollar over 67 US cents.
I know a weak currency isn’t necessarily a good thing but Hickey points out the rise in the value of the dollar will cancel out some of the gains from the better auction price.