Dairy product prices fell in the latest GlobalDairyTrade auction, declining for the second time this year, amid expectations that worldwide supply will outstrip demand.
The GDT average winning price fell 1.4% to US$2,405, down from US$2,458 at the previous auction two weeks ago. Some 21,930 tonnes of product was sold, down from 25,671 tonnes at the last auction two weeks ago reports BusinessDesk.
The AgriHQ 2015-16 Farmgate Milk Price fell 17 cents to $4.43 per kilogram milk solids after the GDT auction. This price compares to Fonterra’s current 2015-16 milk price forecast of $4.60/kgMS.
“The weak GDT results, while disappointing, were aligned with market expectations,” says AgriHQ dairy analyst Susan Kilsby. “Global demand for dairy commodities continues to be weak around global milk supply.”
Rennet casein fell 7.8% to US$4,405 a tonne while butter dropped 5.9% to US$3,162 a tonne. Cheddar shed 3.4% to US$2,867 a tonne and skim milk powder retreated 3.2% to US$1,835 a tonne.
Lactose declined 1.7% to US$579 a tonne while whole milk powder slipped 0.5 percent to US$2,188 a tonne.
The NZX Dairy Futures market had anticipated a reduction in both whole milk powder and skim milk powder prices from those achieved at the previous GDT event, Kilsby noted.
Butter milk powder rose 2.7% to US$1,620 a tonne, and anhydrous milk fat gained 2.4% to US$3,724 a tonne.
There were 115 winning bidders out of 156 participating bidders at the 11-round auction. The number of qualified bidders was 616, the same as at the last auction.
