GDT auction: Dairy prices drop 2.8 per cent; whole milk powder down 4.2 per cent

The latest Global Dairy Trade result will be bad news for farmers. Photo / Brett Phibbs

Prices have dipped again in the latest Global Dairy Trade auction, held overnight, with a 2.8 per cent decline across the board.

It is the second drop in a row, with the index falling 2.3 per cent on March 5.

Although the negative result was expected, it was still more than the analysts predicted, with everything down except anhydrous milk fat.

Stu Davison, senior manager of global dairy insights with High Ground Dairy, said one factor was less demand from China.

Davison said China bought a third of the whole milk powder sold, whereas they usually purchase at least 50 per cent.

This represents China’s lowest market share in 10 years, he said.

This event saw another big decrease for whole milk powder (WMP) and skim milk powder (SMP).

Fonterra’s biggest reference product, WMP, plunged 4.2 per cent to an average of US$3143/MT.

SMP is the co-op’s second-biggest reference product – it dropped 4.8 per cent to an average of US$2517/MT, on the back of a 5.2 per cent fall two weeks ago.

Lactose was down 4.4 per cent to an average of US$778/MT and cheddar dipped 1.9 per cent to an average of US$4192/MT.

Butter fell 1.4 per cent to an average of US$6408/MT.

Mozzarella dropped 1.0 per cent to an average of US$3905. This was the seventh event, and the sixth fall, for the product after it debuted on December 6 at an average of US$4005/MT.

Only anhydrous milk fat bucked the trend, with a 2.5 per cent rise to an average of US$6794/MT.

Butter milk powder was not available at this event.

A total of 19,655 MT of product was purchased by 112 successful bidders, compared to 21,235 MT and 125 winning bidders last time.

On February 12, Fonterra raised its forecast farmgate milk price for 2023/24 - to a range of $7.30–$8.30 per kgMS, with a midpoint of $7.80.

This is 30 cents up on Fonterra’s previous $7.50 midpoint, announced on December 7, with a range of $7.00–$8.00 per kgMS.

Fonterra’s previous $7.25 midpoint, was announced on October 9, with a range of $6.50–$8.00 per kgMS.

This followed downgrades on August 18 to between $6.00 and $7.50 per kgMS, with a midpoint of $6.75, and August 4 of between $6.25 to $7.75 per kgMS.