22 Feb 2017

Global dairy prices decline

7:25 am on 22 February 2017

Dairy product prices fell 3.2 percent at the overnight Global Dairy Trade auction.

Dairy cow.


That compares to a 1.3 percent rise in the previous auction.

Both skimmed milk powder and whole milk powder prices fell 3.8 and 3.7 percent respectively.

The wholemilk powder price helps determine the farm gate payout to farmers, and at $US3200 a tonne that's still roughly what farmers need to break even.

Butter milk powder prices recorded the biggest drop with a decline of nearly 13 percent.

Only butter and lactose prices registered increases in average prices, with butter up 0.2 percent and lactose up 6.8 percent.

AgriHQ dairy analyst Susan Kilsby said that while the lift in Fonterra's milk intake expectations would not have come as a surprise to many market participants, it had still had an impact on the market.

"Many buyers will be aware that milk intakes in New Zealand are starting to improve following very poor production during the spring.

"The dairy markets however are very closely balanced so it does not take much to tip the balance one way or other with small changes in supply volumes."

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