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February 2014 Dairy Update

Thursday, 27 February 2014 at 1:21pm

This month we saw cooler temperatures, some rain and above average summer pasture growth rates for many farms.  Milk flow volume figures are ahead of last year but the coming weeks will determine how far ahead this year’s milk flow will end up. 

Latest Dairy Industry data shows good progress on improving cow fertility rates, as this performance marker is an important influence on farm profitability.

Global demand is still strong, even at the record high prices we are seeing.  The latest dairy auction saw whole milk powder prices up 0.5% and averaging once again over $5000/tonne, levels that will definitely sustain projected payout predictions and ensure an excellent income year for dairy farmers.

If you want to better understand how the Global Dairy Trade works here is a quick explanation:

• Auctions start with a pre-announced starting price
• Bidders bid the quantity of each product that they wish to purchase at the announced price. 
• If the total demand exceeds the quantity on offer, then the price of that product increases between rounds and bidders must re-bid their     desired quantity. 
• The trading event runs over several rounds with the prices increasing round by round until the quantity of bids received for each product matches the quantity on offer for the product.

 

A full explanation can be found on the official Global Dairy Trade website here: http://www.globaldairytrade.info/en/what-is-gdt/how-does-it-work/