Commodity prices have fallen for the fifth month in a row, with a 2.4 per cent drop in ANZ’s latest measure of key exports, with milk powder taking the biggest knock in July.
But world prices for beef were up 11.3 per cent last month.
Overall, the ANZ Commodity Price Index is now down 9.8 per cent from its peak in February.
The index measures a basket of key exports in world price terms. Because of a stronger New Zealand currency in July, the New Zealand dollar index for commodities was down 3.5 per cent, and showing a fall of 11.6 per cent for the year.
In July, prices for ten commodities fell, while five commodity prices went up and two were unchanged in world price terms.
The biggest drop was for whole milk powder which dropped 12 per cent and is now down 53 per cent on a year ago.
That was mainly because of an overhang of inventory in China and a good production year in New Zealand.
The index also showed drops for butter, down 6.8 per cent, cheese down almost 3 per cent and skim milk powder down just as much.
Apple prices fell 4.3 per cent because of lower demand in Europe, though that was offset somewhat by better returns in Asia.
In contrast to lower dairy product prices, beef was up 11.3 per cent in the month, driven by a shortage of domestic manufacturing beef in the United States during a period of peak demand over the northern summer.
Demand from the US food service sector had also bounced back with better economic growth, ANZ said.
Overall meat prices are up 21 per cent on a year ago.
Aluminium prices were up 5.5 per cent in July as the market expected further capacity cuts in China and the rest of the world. Aluminium prices are now up almost 10 per cent in the past year.