Commodity milk value
Spot CMV – 26 July 2021
26 July 2021
The Australian dairy export index declined this week, the result of commodity price falls and despite a weaker Australian dollar.
In spot quotes from Australasian exporters, cheddar prices fell US$100/t from the prior week to US$4,300/t. Butter prices were also weaker – down US$10/t from the previous week to US$4,470/t. WMP weakened US$100/t to US$3,850/t. SMP also fell, down US$30/t from the prior week to US$3,100/t. Spot trends took a lead from last week’s seventh consecutive negative GDT result, although SMP values fared worse at the auction.
The Australian dollar was lower, ending the week at US73.7c, continuing its downward trend for the fourth consecutive week as demand for US dollar remains strong at the expense of more risk-sensitive currencies. Extended lockdown as COVID cases surge also contributed, prompting some downgrades to the economic outlook and likely delaying the RBA raising interest rates..
The combined impact of these factors pruned 8 cents from the commodity milk value for southern Australian dairy manufacturers to $6.61/kgms.
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 2018/19 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.