4 May 2016

Dairy prices drop in latest auction

8:36 am on 4 May 2016

Global dairy prices have fallen slightly in the latest auction overnight.

The drop in the Global Dairy Trade auction comes on the back of two consecutive increases.

Overall, prices fell by 1.4 percent to $US2203 a tonne.

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Graphic: Global Dairy Trade

But the key whole milk powder price recorded a modest gain of 0.7 percent to $US2176 a tonne.

That price helps determine the payout to dairy farmers but remains stubbornly below the level of about $US3000 that some farmers need to break even.

The dairy futures markets had been expecting prices at this auction to rise by about 3 percent, and to keep improving.

Fonterra and market commentators are predicting prices will lift later in the year as European dairy production drops off toward the end of their milking season.

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