Dairy prices are at near two-year low after the eighth consecutive fall in the global auction overnight.
The average price at the auction fell 4.3% to US$3507 a tonne, following the 3% drop in the previous auction two weeks ago.
The price of whole milk powder, which strongly influences the payout to farmers, fell 2.4% to US$3364 a tonne.
The Global Dairy Trade Price Index fell to its lowest level since January 2024.
NZX dairy analyst Rosalind Crickett said the latest auction saw weak bidding amid oversupply in the market.
“Regional buying again was dominated by North Asia which accounted for 50% of total product sold,” she said.
Crickett said the decline in milk powders (both whole milk and skim milk) came in above expectations.
She said global milk production was showing no sign of slowing down, with Chinese milk collections also rebounding.
“All in all, this is expected to keep downward pressure on milk powder prices globally, until a supply correction occurs,” Crickett said.
Butter prices fell more than 12%, while cheddar prices rose more than 7%.
Softening dairy prices have prompted dairy companies to lower the midpoint of its milk price forecast to $9.50 per kilogram of milk solids.
rnz.co.nz
