Dairy product prices slip for seventh time in nine auctions

Dairy product prices fell at the Global Dairy Trade auction. Photo: Lynn Grieveson

Dairy product prices fell at the Global Dairy Trade auction, as whole milk powder slid amid data showing New Zealand’s processors collected record levels of milk in recent months because of improved weather conditions.

The GDT price index fell 1.2 percent from the previous auction two weeks ago. The average price was US$3,481 a tonne. Some 21,634 tonnes of product was sold, up from 21,580 tonnes two weeks ago.

Whole milk powder slid 1 percent to US$3,189 a tonne.

Regular grade whole milk powder to ship in August was down 1.4 percent, less than the 1.6 percent drop the NZX dairy derivatives market had expected in this grade and contract of product, according to Amy Castleton, AgriHQ dairy analyst.

The difference between market expectations and the actual results was a matter of just US$5 a tonne, however, Castleton said in a note.

At the latest GDT auction, cheddar dropped 3.6 percent to US$3,847 a tonne, while anhydrous milk fat declined 2.5 percent to US$6,060 a tonne.

"While milk supply growth has slowed in both Europe and the US, milk is tending to be directed into cheese in these regions, so there is plenty out there," Castleton said.

Rennet casein fell 2.2 percent to US$4,898 a tonne, while skim milk powder dipped 1.1 percent to US$2,003 a tonne.

"This is the first decline we’ve seen in the skim milk powder price index since April," Castleton said. "Fonterra had lifted its offer volumes of SMP ahead of this event."

Meanwhile, butter gained 0.8 percent to US$5,611 a tonne, while lactose jumped 8.2 percent to US$769 a tonne.

Butter milk powder wasn’t offered at this event.

For sweet whey powder, neither an index nor price was available.

The New Zealand dollar last traded at 69.02 US cents as of 2.40pm in New York, compared with 69.42 US cents at the previous close in Wellington.

There were 127 winning bidders out of 165 participating at the 14-round auction. The number of registered bidders rose to 522, up from 519 at the previous auction.