Dairy auction price index down 23% in June quarter

Buyer participation continued to be healthy with normal levels of product clearance. Photo / Mark Mitchell

Prices at the GlobalDairyTrade dairy auction continued to fall across all key commodity products in the June quarter, with the price index dropping by 23 per cent.

The index rose by 16 per cent in the previous quarter, GlobalDairyTrade said in its quarterly report.

Over the June quarter, the wholemilk powder average price fell by 12.8 per cent and skim milk powder was down 19.7 per cent from the first to second quarters.

Over the same period, butter and butter milk powder experienced the biggest falls, with average prices falling by 22 per cent and 26 per cent respectively.

GlobalDairyTrade director Eric Hansen said the dairy sector was experiencing a time of low seasonal supply and low demand, but buyer participation on the platform continued to be healthy with normal levels of product clearance.

"Despite ongoing weak demand for globally traded dairy commodities, GDT cleared 98 per cent of the quantity offered during auctions in the second quarter," Hansen said.

The auction continues to attract bidders generating competition for the products on offer, he said.

Hansen said 54,400 tonnes of product was sold on the auction platform, valued at US$390 million, in the June quarter.

The average supply of 26,000 tonnes per auction during the June quarter was much the same as the previous quarter. The relatively low quantities reflected the normal seasonal cycle experienced in New Zealand, Hansen said.

More than 900,000 tonnes of commodity dairy products have been traded on GDT in the 12 months to the end of June.

Up to US$5 billion ($7.2 billion) of dairy commodity products are sold on the platform annually by leading dairy companies in Europe, the United States, India, Australia and New Zealand.