Commodity milk value

 

27 September 2021

The Australian commodity milk value increased this week, the result of mixed trends in commodity prices and a weaker Australian dollar.

In spot quotes from Australasian exporters, cheddar prices rose US$50/t from the prior week to US$4,350/t. WMP was also higher, up US$50/t to US$3,750/t. Butter was weaker however, down US$60/t from the previous week to US$4,890/t. SMP was flat at US$3,300/t.

The Australian dollar was weaker, ending the week at US72.6c, reflecting its huge exposure to China’s woes and Evergrande’s inability to pay its dollar-denominated bond interest payment.

The combined impact of these changes lifted the commodity milk value for southern Australian dairy manufacturers by 8 cents to $6.92/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.