Commodity milk value

24 January 2022

The spot commodity milk value increased this week, the result of stronger dairy commodity prices following the GDT auction and a weaker Australian dollar.

In spot quotes from Australasian exporters, butter rose US$320/t from the prior week to US$6,160/t. SMP was also stronger, up US$200/t to US$3,970/t. WMP went up US$100/t from the prior week to US$4,100/t. Cheddar also lifted by US$50/t to US$5,350/t.

The Australian dollar was weaker, ending the week at US71.8c, reflecting weak risk appetite among investors and despite positive local labour market news with the unemployment rate falling to 4.2% – the lowest mark since pre-GFC.

The combined impact of these changes lifted the commodity milk value for southern Australian dairy manufacturers by 35 cents to $9.28/kgms, an all-time high.

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.