Global dairy prices dip slightly in latest auction

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Global dairy prices have dropped slightly in the latest Global Dairy Trade auction, held overnight.

The average price at the fortnightly sale dipped 1.3 per cent to $US4600/MT.

This comes after the previous auction two weeks ago, where prices rose 1.5 per cent, the first lift in three months.

Whole milk powder (WMP) - which has the biggest influence on Fonterra's farmgate milk price - fell 0.6 per cent, on the back of a 0.3 per cent decline in the previous event, to an average US$4125/MT.

Skim milk powder (SMP) - Fonterra's second-biggest reference product - was up 1 per cent to an average US$4276/MT, continuing its climb from the last event where it rose 3 per cent.

Butter also remained on the up, with a 2.4 per cent increase to an average US$6213/MT, following on from a 5.6 per cent jump in the previous auction.

Anhydrous milk fat dropped 4.7 per cent to an average US$5913/MT.

However, cheddar took the biggest tumble, dropping 9.0 per cent to an average of US$4875/MT.

Butter milk powder was not offered at this event, and there were no figures available for sweet whey powder or lactose.

20,760 MT of product was purchased by 149 successful bidders - a total of 163 bidders took part in the last auction and the quantity sold was 21,435MT.

For the 2021/22 season, Fonterra's forecast farmgate milk price is $9.10 - $9.50 per kgMS, with a midpoint of $9.30.

Fonterra's opening forecast farmgate milk price for the 2022/23 season is set at $8.25 - $9.75 per kgMS, with a midpoint of $9.00 per kgMS.

NZX Dairy Insights Manager Stu Davison remained encouraged by the underlying demand in the market.

"Key buyer trends returned at this auction, in the form of overall dominant North Asian purchase volumes, helping to fuel expectations that market demand should remain steady for the time being and somewhat extinguish rumours surrounding North Asian demand currently," he said.