Whole Milk Powder Gains at Auction for First Time in Two Months

Whole milk powder auction prices rose for the first time in two months amid expectations of a modest increase in New Zealand production in the second half of the year.

Powder for delivery across all contracts through December rose 2.2 percent, according to a trade-weighted index posted on Fonterra Cooperative Group Ltd.’s GlobalDairyTrade website. The average winning price rose to $4,668 a metric ton.

Fonterra expects about 2 percent growth in New Zealand milk collection in the 2013-14 season, according to a June 10 statement. Slowing global milk supply suggests powder prices across all contracts will remain around current levels until the end of the year, Chief Executive Officer Theo Spierings said in a May 29 interview.

Prices surged to a record in April as a drought declared across New Zealand’s entire North Island including Waikato province, the country’s biggest milk producer, curbed collection. The nation may receive near-normal rainfall through July, the National Institute of Water and Atmospheric Research said last month.

Fonterra on May 29 said it expects to pay its farmers NZ$7 ($5.61) a kilogram of milksolids in the 2013-14 season, up from NZ$5.80 in the season that ended May 31.

Fonterra, which accounts for about a third of the global trade in dairy products, sells whole, skim and butter-milk powder, dried-milk fat, lactose, butter, cheese and casein at its GlobalDairyTrade auctions. Casein is a protein found in milk.

Whole milk powder for August delivery fell 4.3 percent while prices in all other contracts rose.

Prices for August delivery of butter milk powder also fell. Milk fat, butter and skim milk powder prices for August delivery increased, while cheddar, lactose, casein and milk protein concentrate weren’t offered.

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