Fonterra auction prices recover

Whole milk powder prices have risen marginally and the decline in anhydrous milk fat prices has slowed in Fonterra's globalDairyTrade auction.

Whole milk powder sold in the March auction, which closed this morning, for an average US$3281 (NZ$4704) per tonne – US$25 or 0.8 per cent more than last month's auction. It's the first such increase this year. Prices ranged from US$3180 to US$3395 per tonne.

Whole milk powder prices declined in January and February, following five months of consecutive rises which saw the average price rise by 95 per cent.

Paul Grave, globalDairyTrade manager, was pleased with the result.

"This is positive as it's been really stable."

The auction showed a slowdown in the drop in anhydrous milk fat prices, which Fonterra sells in relatively small volumes through the auction. The average AMF price was US$3959, 5.4 per cent (US$244) down on February when prices dropped 7.9 per cent.

Skimmed milk powder, which was offered on the platform for the first time, sold for US$2927.

Mr Grave said Fonterra's recent announcement to open the auction to other dairy companies would not have affected the prices this month.

"That's a medium-term goal," he said. "It's not something that is going to happen in the next few months."

Mr Grave said buyers were focused on ensuring their short- to medium-term supply requirements had been secured and was not sure how supply and demand would influence prices in coming auctions.

The next auction is on April 6.

- © Fairfax NZ News