Dairy product prices fall to the lowest level in 2015
Dairy product prices fell in the latest GlobalDairyTrade auction, hitting the lowest level in the 2015 auctions so far, as prices for milk powder and butter slid amid concern about the outlook for commodities.
The GDT average winning price declined 3.6 percent to $US2,620, down from $US2,746 at the previous auction two weeks ago. It was the lowest level since the last auction of 2014. Some 25,596 tonnes of product was sold, up from 23,162 tonnes two weeks ago.
The AgriHQ Seasonal Farmgate Milk Price for the 2014-15 season decreased by 3 cents per kilogram milksolids to $4.51/kgMS following the auction. This is comparable with Fonterra's $4.70/ kgMS forecast.
"Dairy commodity markets remain weak across the globe," AgriHQ dairy analyst Susan Kilsby said in a note. "Growth in global milk supply is beginning to slow as farmers respond to lower milk prices but it will still take some time before markets are back in equilibrium."
Skim milk powder dropped 7.8 percent to $US2,253 a tonne, while butter fell 6.6 percent to $US3,026 a tonne, and whole milk powder weakened 4.3 percent to $US2,446 a tonne.
"It was pleasing to see that the drop in whole milk powder prices was not as large as it has been in previous auctions; however this was partially offset by a larger drop in the skim milk powder price," Kilsby. "The movements in the milk powder prices were largely as anticipated by the NZX Dairy Futures market."
Rennet casein slipped 0.6 percent to $US6,949 a tonne.
Butter milk powder rose 2.1 percent to $US2,208 a tonne, while anhydrous milk fat gained 2.3 percent to $US3,744 a tonne, and cheddar increased 2.7 percent to $US2,888 a tonne.
Sweet whey powder was not offered at the latest event, while lactose was offered and sold at an average price of $US572 a tonne.
The New Zealand dollar last traded 0.9 percent higher at 75.89 US cents at about 2:36pm in New York, compared with 75.22 US cents at 5pm in Wellington the previous day.
There were 108 winning bidders out of 154 participating bidders at the 11-round auction. The number of qualified bidders rose to 673, up from 667 at the last auction.