Dairy prices have fallen to levels close to a two-year low following the eighth straight decline at the global auction overnight.
The auction’s average price dropped 4.3% to US$3507 per tonne, after the 3% decline in the prior event two weeks ago.
Whole milk powder prices dropped 2.4% to US$3364 per tonne.
NZX dairy analyst Rosalind Crickett noted weak bidding in the latest auction amid market oversupply. She said North Asia dominated regional buying once again, comprising 50% of total product sold.
Crickett also noted that the drop in both whole milk and skim milk powders exceeded expectations. She observed that global milk production shows no signs of slowing, with Chinese milk collections rebounding as well.
“All in all, this is expected to keep downward pressure on milk powder prices globally, until a supply correction occurs.”
Regarding butter, prices dropped over 12%, while cheddar prices climbed more than 7%.