Global dairy prices fall to 9-month low

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Global dairy prices have fallen to a nine- month low in the latest global dairy auction.

The average price at the fortnightly sale fell 5 per cent to USD 4166 a tonne, after falling 4.1 per cent in the previous auction.

It is the lowest price since early October last year, and 18 per cent below the record set in March. Prices have fallen in eight of the past nine auctions.

“Every indicator over the last fortnight has been signaling a coming serious slide or correction,” NZX dairy analyst Alex Winning said.

“Extra volumes on the GDT platform and expectations of market pressures on end consumers have created a market that expected – almost needed – prices to fall significantly lower.”

The price of wholemilk powder, which strongly influences the payouts for local farmers, was 5.1 per cent lower at USD 3757 a tonne.

Prices for all other products offered also fell, with anhydrous milk fat and butter down 2.1 per cent, cheddar falling 2 per cent, and an 8.6 per cent decline for skim milk powder.

Winning said, buyers from South East Asia had saved the day buying as much as Northern Asian bidders, especially for whole milk powder.

“This downward price direction is also unsurprising considering wider macroeconomic factors; food service will be expecting some impacts and affordability of butter for households will also be questioned currently,” he said.

Winning said, the broader market was getting back into balance amid broad uncertainty, even though it might be unpalatable for local dairy producers.

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