Further downward pressure on global dairy prices

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Prices have plummeted in the latest Global Dairy Trade auction, held overnight, with a 3.9 per cent decline across the board.

It is the third significant drop in a row, with the index falling 4.6 per cent on October 18 and 3.5 per cent on October 4.

Whole milk powder, which peaked in March at US$4757/MT, dipped 3.4 per cent to an average US$3279/MT – nearly US$300 less than two weeks ago.

Skim milk powder - Fonterra's second-biggest reference product – dropped 8.5 per cent and over US$500/MT from two weeks ago, to an average US$2972/MT.

The biggest percentage fall came from butter milk powder, which plunged 11.4 per cent to an average US$2973/MT, after a 4.4. per cent drop last time.

Anhydrous milk fat fell 1.7 per cent with an average of US$5562/MT.

Cheddar bucked the trend with a 0.9 per cent increase, to an average US$4802/MT.

Similarly, butter rose a slight 0.2 per cent to an average US$4868/MT.

28,867 MT of product was purchased by 116 successful bidders, compared to 26,106 MT and 125 winning bidders last time.

In September, Fonterra left its forecast for 2022/23 unchanged - a farmgate milk price range of $8.50–$10.00 per kgMS, with a midpoint of $9.25.

Its forecast 2022/23 normalised earnings guidance is in a range of 45 to 60 cents.