6 Jul 2016

Milk prices down in dairy auction

7:37 am on 6 July 2016

Global dairy prices have eased in the latest overnight auction.

The latest drop in price follows no change in prices at the previous auction, and two slight consecutive rises in late May and early June.

The latest drop in price follows no change in prices at the previous auction, and two slight consecutive rises in late May and early June. Graphic: GDT

The average price fell 0.4 percent to $US2345 a tonne.

That follows a flat result a fortnight ago and two solid rises previously.

The critical whole-milk powder price, which helps determine the payout to Fonterra's dairy farmers, fell 1.6 percent to $US2062, which is below a break-even range for many farmers who need $US3000 or more.

Skim milk powder was up by 2.6 percent, but butter, butter milk powder and cheddar fell by up to nearly eight percent.

Analysts and the latest Ministry for Primary Industries Situation Outlook for the dairy sector suggests dairy prices will likely stay subdued for the rest of the year, but recover next year.

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