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Dairy product prices dropped to the lowest level since July 2012 in the latest GlobalDairyTrade auction, led by a slump in rennet casein and butter milk powder.
The auction results come after New Zealand commodity prices fell to a 17-month low in August, based on the ANZ Commodity Price Index, with whole milk powder down 15 percent.
Yet Fonterra [NZX: FCG] last week announced plans to ramp up milk powder production in New Zealand, while licensing its Anmum brand of infant formula to a Chinese partner, a sign it is upbeat about longer-term demand.
The GDT price index dropped 6.0 percent to US$2,787, down from US$3,000 two weeks ago. Some 57,010 tonnes of product was sold, up from 46,387 tonnes two weeks ago.
In the latest GDT auction, rennet casein sank 14.3 percent to US$8,232 a tonne, while butter milk powder shed 12.9 percent to US$3,174 per tonne.
Skim milk powder dropped 9.5 percent to US$2,600 a tonne, anhydrous milk fat slid 5.8 percent to US$3,360 a tonne, and butter gave up 5.6 percent to US$2,753 a tonne.
Cheddar fell 4.9 percent to US$3,275 a tonne, while whole milk powder declined 4.3 percent to US$2,673 a tonne
Neither lactose nor sweet whey powder were offered at the event.
The New Zealand dollar recently traded at 83.09 US cents, after dipping as low as 82.92 before the release.
There were 158 winning bidders out of 184 participating bidders at the 10-round auction. The number of qualified bidders rose to 660, from 650 at the last auction.
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