Fonterra dairy auction prices fall again

Last updated 07:54 06/11/2013

Relevant offers


Manawatu-Rangitikei milk production down Hawera High School agriculture students visit award-winning Trewithen Farm at Tikorangi Milk production below last season at Westpac Taranaki Agricultural Research Station Specialist Emma Cuttance will tell Taranaki farmers how to manage facial eczema Ballance Taranaki Farm Environment Awards will go ahead in 2017 Carina Chaves of Costa Rica finds Taranaki winter tough Bailey, Farrelly to step down from Fonterra board New Zealand's clean and green image no selling point for Synlait chief Gertie's gas: How a single cow contributes to climate change All-grass farming at the Lincoln dairy farm

A second consecutive drop in the price of products at last night's Fonterra commodity auction could signal global dairy supply is on the rise.

The GlobalDairyTrade's trade-weighted price index overnight dropped 1.8 per cent compared with the last sale.

The average winning price was down to US$4797 ($5781) a tonne from US$4888 a tonne.

Maximum supply, the measure of how much product Fonterra has for sale, rose to 51,874 tonnes from 45,556, with a total of 49,304 sold.

BNZ currency strategist Mike Jones said the drop was likely to reflect an improving global milk supply.

A rise in global dairy supply had been anticipated for some time and the drop in prices at last night's auction was the first sign this was happening, he said.

"It's a result that's very much within the bounds of expectations."

However, New Zealand dairy commodity prices were still 41 per cent higher than they were a year ago, Jones said.

The most recent drops in dairy prices would not have an effect on the Fonterra payout, he said.

Prices would have to fall by at least 10 per cent before anyone started to panic, he said, adding that markets expected prices to hold up rather than collapse.

Whole milk powder fell 3.7 per cent.

Jones said this was likely to have had an effect on the overall drop in the dairy commodity price index as whole milk powder was the largest category by volume.

In the latest auction two of the nine product categories fell.

Butter led the decliners down 7 per cent compared with the last sale.

Anhydrous milk fat was up 6.9 per cent and milk protein concentrate gained 4.6 per cent.

In last night's auction 199 bidders took part, with 129 winning bidders, and 820 qualified to bid.

Ad Feedback

- Stuff

Special offers

Featured Promotions

Sponsored Content