Dairy product prices fell to a new 15-month low in the latest GlobalDairyTrade auction, paced by whole milk powder, and are now 23 per cent lower than when Fonterra forecast a record milk payout in February.
The GDT price index fell 1.8 per cent to US$3,873 a tonne, down from US$3,950 a tonne two weeks ago and the seventh straight decline. Some 33,677 tonnes of product was sold, the lowest since June 2012 and down from 38,174 tonnes at the previous auction.
Fonterra's sales rose 21 per cent in its first half though profit tumbled as its margins were squeezed by milk powder prices running ahead of products such as cheese and casein which count milk as a raw material. In the latest auction, cheddar fell 2.1 per cent to US$4,108 a tonne, the lowest since March last year, while rennet casein rose 4.6 per cent to a four-month high of US$11,861 a tonne.
Whole milk powder, the biggest product sold on the auction site by volume, fell 1.1 per cent to US$3,877 a tonne, a 15-month low. Skim milk powder dropped 3.5 per cent to US$3,733 a tonne while butter declined 3.8 per cent to US$3,667 a tonne.
Butter milk powder fell 1.9 per cent to US$3,950 a tonne and anhydrous milk fat rose 1.9 per cent to US$4,255 a tonne. Milk protein concentrate and lactose weren't offered at the event.
There were 139 winning bidders out of 193 participating bidders at the auction over 14 rounds. The number of qualified bidders rose to 734 from 724 at the last auction.