As the Fonterra auction is now held twice a month with varying intervals, this page has been changed to emphasise the price changes between auctions for different products. For further information on individual product details, please visit the Fonterra site by clicking here.
Auction summary for 15 May 2013:
The most recent auction results show an overall drop in the average price for dairy commodities. This has been influenced by the relatively large drops in prices for product delivered in September and October (contract periods 3 and 4), which occur at the start of the southern hemisphere spring flush.
Overall, the volume of product sold was 56% lower than at the same time in 2012, with SMP the only product with winning bids for June delivery.
The next auction is due to take place on Tuesday 4 June 2013.
* Weighted average price.
**gDT TWI weighted average price - see notes below.
|Changes in Price Indices||Contract
|Anhydrous Milk Fat (AMF)||n.a.||2.6%||0.0%||-3.5%||-2.8%||-4.7%||-0.2%|
|Butter Milk Powder (BMP)||n.a.||-5.1%||n.a.||n.a.||n.a.||n.a.||-5.1%|
|Milk Protein Concentrate (MPC70)||n.a.||n.a.||n.a.||n.a.||n.a.||n.a.||n.a.|
|Rennet Casein (RenCas)||n.a.||3.7%||n.a.||n.a.||n.a.||n.a.||3.7%|
|Skim Milk Powder (SMP)||-4.3%||-1.2%||-5.7%||-4.2%||-2.2%||n.a.||-2.8%|
|Whole Milk Powder (WMP)||n.a.||2.8%||2.9%||-3.8%||-2.5%||-2.0%||-1.7%|
|All Products (Trade-Weighted)||-4.3%||1.1%||-0.8%||-4.0%||-2.4%||-2.3%||-2.1%|
Source: GlobalDairyTrade platform
Notes to the auction
*gDT-TWI™ and All Products (WMP,AFM,SMP) TWI are chain-linked, trade-weighted Fisher indices using total international trade flows which represent the movement in auction prices between auction events. The indices use globalDairyTrade prices where available and USDA Dairy Market News prices elsewhere. USDA Western Europe average price for Butter Oil is used for AMF prior to December 2009, USDA Oceania average price for SMP is used prior to April 2010, and USDA Oceania average price for WMP is used prior to August 2008.
The Fonterra auction takes place bi-weekly on an online trading platform called GlobalDairyTrade. It started on 3 July 2008. Fonterra accounts for more than a third of international dairy trade. Although Fonterra will only sell up to 20% of its commodities through this platform, sales results from GlobalDairyTrade provide a global benchmark for commodity prices.
Six contracts are made available, corresponding to future delivery periods. For example, 'contract period 1' provides for products where the shipment period is the first month after the month of the Trading Even and 'contract period 6' means that shipment begins six months after the trading event.
The use of six contract periods has been in effect since April 2012.
The auction always follows the same pattern. Five days before the start of the event, volumes available and starting prices are made public. During the trading, in each successive bidding round, the price is raised. Given the announced prices, bidders enter the volume they wish to purchase. This continues until the available volume is cleared, each customer staying in as long as they enter volume bids.