16 September 2019
The spot commodity milk value for southern Australian dairy manufacturers declined this week, alone the result of a stronger Australian dollar.
In spot quotes from Australasian exporters, SMP quotes increased for the second week in a row – up US$22/t to US$2,600/t. Cheddar prices were unchanged for the fifth week in a row at US$3,850/t. Butter and WMP quotes were also unchanged from the previous week at US$4,035/t and US$3,100/t respectively.
The Australian dollar gained ground against the US currency, ending the week at US$0.6872. This reflected comments from President Trump that he is delaying scheduled tariff hikes on Chinese products by two weeks, which in turn followed news that China exempted a basket of US products from its own tariffs. The combined impact of these factors pruned 2 cents from the commodity milk value for southern Australian dairy manufacturers which now stands at $6.18kgMS.
The spot commodity milk value (CMV) is updated weekly 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 2017/18 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.