Dairy product prices declined at the Global Dairy Trade auction, as whole milk powder and butter fell amid expectations of ample supply.
The GDT price index dropped 3.6 per cent from the previous auction two weeks ago.
The average price was $3044 a tonne, compared with US$3136 a tonne two weeks ago. Some 32,041 tonnes of product was sold, down from 34,076 tonnes two weeks ago.
Whole milk powder fell 2.1 per cent to US$2,883 a tonne. "Buyers will be feeling that whole milk powder will be amply available in the coming months, due to an anticipated lift in New Zealand milk production this season, along with already positive results for June and July milk supplies," AgriHQ dairy analyst Amy Castleton said in a note.
Regular grade whole milk powder to ship in October was down 3.2 per cent, said Castleton, adding that the drop was unexpected. At the latest GDT auction, butter plunged 8.5 per cent to US$4,392 a tonne.
"Fonterra had lifted its butter offer volumes ahead of this event, with 5 per cent more than forecast being made available, when measured at the average supply level," according to Castleton.
"There was a little more butter volume sold at this event than at the last event," Castleton noted. "
Butter offer volumes were also lifted for upcoming events, so buyers will not be in any rush to secure product now, especially if they consider prices will continue to trend down."
Anhydrous milk fat sank 6.9 per cent to US$5,321 a tonne."
Anhydrous milk fat offer volumes were as forecast for this event, but Fonterra has lifted offer volumes over the next 12 months," Castleton said.
"So buyers will be confident that enough product will be available in future."
Cheddar retreated 4.7 per cent to US$3,484 a tonne, while skim milk powder slipped 1.3 per cent to US$1951 a tonne.
Lactose traded at $914 a tonne. Bucking the trend, rennet casein rose 2.8 per cent to US$5138 a tonne.
Butter milk powder was not offered at this event. For sweet whey powder, neither an index nor price was available.
The New Zealand dollar last traded at 66.88 US cents as of 3.19pm in New York, compared with 66.41 US cents at the previous close in Wellington.
There were 126 winning bidders out of 158 participating at the 13-round auction. The number of registered bidders was 534, up from 529 at the previous auction.