5 Dec 2012

World dairy prices fall in Fonterra auction

12:47 pm on 5 December 2012

Prices have fallen two percent in Fonterra's latest fortnightly global dairy auction.

The average price fell to $US3,290 a metric tonne, the first drop in in two months

Whole milk powder led the fall in prices, down 3.5% while anhydrous milk fat bucked the trend, rising 3.7%.

BNZ economist Doug Steel says milk powder supply has outstripped demand putting downward pressure on the price.

He expects dairy prices to strengthen next year as the global economy continues its recovery from the 2008 financial crisis.