21 Aug 2013

Milk prices up, but auction volumes down

12:49 pm on 21 August 2013

International milk prices rose, but volumes fell in Fonterra's second auction since the contamination scandal.

Prices in the global dairy auction rose 2.3% to an average selling price of $US4941 per tonne, , the fourth gain in five auctions.

AAP reports whole milk powder rose 2.8% to $US4005 per tonne. Skim milk powder fell 0.7% to $US4426 per tonne.

The price of anhydrous milk fat rose 7.1% to $US4931 a tonne and butter milk powder fell 3.1% to $US4689 per tonne. Butter rose 3.3% to $US3614 per tonne.

Cheddar rose 0.9% to $US4375 per tonne. Milk protein concentrate rose 1.5% to $US7828 per tonne.

Prices fell 2.4% in the previous sale which was held shortly after Fonterra warned that products exported to China could contain a bacteria that can cause botulism.

Just over 56,000 metric tonnes was sold on Tuesday night, 7.3% lower than the previous sale.


ASB senior economist Jane Turner said prices are showing little effect from the contamination scare.

However, some analysts say the rise disguises the fact Fonterra is losing a premium it once commanded over other countries.

But NZX Agrifax analyst Susan Kilsby said the reduction in the skim milk premium has more to do with seasonal supply than it does botulism. She said the same thing happened last year.