Dairy product prices fell to a new 15-month low in the latest GlobalDairyTrade auction, paced by whole milk powder, and are now 23 percent lower than when Fonterra Cooperative Group forecast a record milk payout in February.
The GDT price index fell 1.8 percent to US$3,873 a tonne, down from US$3,950 a tonne two weeks ago and the seventh straight decline. Some 33,677 tonnes of product was sold, the lowest since June 2012 and down from 38,174 tonnes at the previous auction.
Fonterra's sales rose 21 percent in its first half though profit tumbled as its margins were squeezed by milk powder prices running ahead of products such as cheese and casein which count milk as a raw material. In the latest auction, cheddar fell 2.1 percent to US$4,108 a tonne, the lowest since March last year, while rennet casein rose 4.6 percent to a four-month high of US$11,861 a tonne.
Whole milk powder, the biggest product sold on the auction site by volume, fell 1.1 percent to US$3,877 a tonne, a 15-month low. Skim milk powder dropped 3.5 percent to US$3,733 a tonne while butter declined 3.8 percent to US$3,667 a tonne.
Butter milk powder fell 1.9 percent to US$3,950 a tonne and anhydrous milk fat rose 1.9 percent to US$4,255 a tonne. Milk protein concentrate and lactose weren't offered at the event.
There were 139 winning bidders out of 193 participating bidders at the auction over 14 rounds. The number of qualified bidders rose to 734 from 724 at the last auction.