NZ: Prices surged 2.6% at the GDT auction - TDS

Research Team at TDS, notes that the New Zealand prices +2.6% at the GDT auction yesterday, driven by a 12% drop in volumes, the lowest in 3 years.

Key Quotes

“Later this month, Fonterra will announce its forecast for the 2016/17 season. A price around $4.50/kg is expected. This compares to the milk price forecast of $3.90/kg for the current season vs a $5.25/kg breakeven price.

Input and Output Producer Prices were released for Q1. Input prices dropped -1% and output –0.2%. Not as relevant given CPI has already been released, but underscores weak price pressures.”