12 November 2018
The Australian spot commodity milk value fell again this week, after another gain in the Australian dollar compounding the impact of weaker milk powder prices.
In average spot quotes from Australasian exporters, SMP quotes fell US$20/t from the prior week to US$2,000/t. WMP prices also dropped, down US$50/t from the prior week to US$2,675/t – in line with trends at last week’s GDT event. Butter and cheddar prices were unchanged from the prior week at US$4,300/t and US$3,550/t respectively.
The Australian dollar ended the week higher at US$0.7244 – driven by stronger global risk sentiment early in the week, US mid-term elections results, and stronger-than-expected Chinese October exports data.
These factors combined to weaken the weekly spot commodity milk value for southern Australian dairy manufacturers by 7 cents to $4.97/kgMS. This compares to our current 2018/19 full season forecast for the CMV of $5.50/kgMS.
The spot commodity milk value (CMV) is updated weekly by us as an estimate of milk value based on weekly spot prices for key commodities and the average industry product mix, converted to Australian dollar, net of costs.
Between 2011/12 and 2016/17 the CMV has averaged over 80% of final farmgate returns – ranging between 70% and 95% of the final average price paid by manufacturers in southern Australia. For more information on the CMV calculation please visit this page.
Freshagenda’s commodity milk value (CMV) measurement and outlook is based on spot prices and Freshagenda’s forecasts of fundamental values of major commodity products.
Our commodity milk value (CMV) measurement and outlook is based on spot prices and Freshagenda’s forecasts of fundamental values of major commodity products (cheese, butter, whole and skim milk powder), based on our rolling outlook for the global dairy trade balance. Projected product values are converted into a value of milk at farmgate using the industry’s product mix, deducting conversion costs, and converting to Australian dollars per kilogram of milksolids.
How can I use Freshagenda’s commodity milk value?
Between 2011/12 and 2016/17 the CMV has averaged around 80% of final southern farmgate returns – ranging between 70% and 95% of the final average price paid by manufacturers in southern Australia.
Who are Freshagenda?
Freshagenda is led by food industry consultants and analysts with combined hands-on experience in excess of 45 years in commodity markets and value chain analysis. We have a solid commercial understanding of market dynamics affecting food industry sectors and supply chains and delivers complex information in concise, easy-to-understand formats.
What is Global Dairy Directions?
A forward looking tool that allows dairy companies, brokers, traders and processors to project the outcome of future scenarios in global and local dairy markets based on variable key assumptions.
Built in Microsoft Excel, our Global Dairy Directions platform uses historical data along with a big set of macros, allowing users to run queries, test scenarios and project future possible outcomes in their part of the dairy industry. It spans the globe as it contains data from key dairying regions all over the world and thus can be used as a tool to help navigate strategic planning at management level.
We include trade data from South America, the US, Europe, New Zealand and Australia as well as other emerging regions. We rely on different sources for our data, including Global Trade Tracker which provides us with up-to-date data, so our clients always have the latest available data at their hands.