Dairy product prices declined at the Global Dairy Trade auction as whole milk powder sustained its downward trend amid greater supply.
The GDT price index fell 1.9 per cent from the previous auction two weeks ago. The average price was US$2901 a tonne, compared with US$2934 a tonne two weeks ago.
Some 41,981 tonnes of product was sold, up from 39,143 tonnes two weeks ago.
Whole milk powder fell 1.2 per cent to US$2753 a tonne.
"A decline had been expected, as volumes of whole milk powder are building at this time of season as New Zealand heads into its peak milk production period," AgriHQ dairy analyst Amy Castleton said in a note.
To be sure, the price for regular grade whole milk powder to ship in December rose 1.3 per cent, against expectations for a 0.4 per cent decline in this grade and contract, Castleton added.
"Demand for whole milk powder was high," Castleton noted. "North Asia (which includes China) bought more than half of the whole milk powder that was sold."
"China is likely to be buying product to ship in December at this time so that it lands during the period in which a lower tariff rate applies, from January 1, 2019," Castleton said.
At the latest GDT auction, butter dropped 5.9 per cent to US$4016 a tonne, while anhydrous milk fat shed 4.4 per cent to US$5069 a tonne.
"The decline in prices for the milk fat products seems to simply be on greater volumes-there was more butter and anhydrous milk fat sold at this event than at the" equivalent one a year earlier, according to Castleton. "However, Oceania fat prices are quite low relative to both Europe and the United States."
Cheddar retreated 1.2 per cent to US$3468 a tonne, while skim milk powder eased 0.3 per cent to US$1982 a tonne.
Meanwhile, lactose rose 0.6 per cent to US$913 a tonne, while rennet casein gained 3.0 per cent to US$5552 a tonne, and butter milk powder climbed 3.6 per cent to US$2522 a tonne.
For sweet whey powder, neither an index nor price was available.
The New Zealand dollar last traded at 65.96 US cents as of 2.24pm in New York, compared with 66.16 US cents at the previous close in Wellington.
There were 143 winning bidders out of 170 participating at the 15-round auction. The number of registered bidders was 506, up from 503 at the previous auction.