2 Jul 2014

Global dairy prices still falling

11:53 am on 2 July 2014

Dairy prices fell in the latest international auction, taking the average selling price to $US3595 a tonne, a 4.9 percent drop since the last fortnightly sale.

Whole milk powder prices shed 5.5 percent in the fortnightly GlobalDairyTrade auction overnight on Tuesday.

Prices have plunged 29 percent since hitting a record $US5042 a tonne in early February. It is the lowest price since January 2013.

The fall is the ninth decline in the last 10 auctions, with the sole increase occurring two weeks ago.

ANZ Bank rural economist Con Williams said Fonterra had already cut supplies to the auction in response to China holding a lot of stock, but the move failed to stabilise prices.

"The market seems to be looking at they year ahead and thinking there's going to be plentiful supplies."

Prices for whole milk powder, the largest amount of product sold, dropped to $US3459 a tonne, down 4.5 percent, skim milk powder to $US3810 (0.9 percent down), butter to $US3181 (13.6 percent) cheddar to $US4226 (2.9 percent) , anhydrous milk fat to $US3606 (7.4 percent) and rennet casein to $US10,789 (2.1 percent).

That offset price gains for butter milk powder of 4 percent to $US4135.

Volumes sold rose by 30 percent to 41,513 tonnes.

A milk processing plant in Taranaki.

A milk processing plant in Taranaki. Photo: PHOTO NZ