Global dairy prices remain steady in latest auction

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Dairy product prices were steady at the Global Dairy Trade auction as a rally in rennet casein offset a drop in butter milk powder.

The GDT price index was unchanged in percentage terms from the previous auction three weeks ago.

The average price was US$3,136 a tonne, compared with US$3,222 a tonne three weeks ago. Some 34,076 tonnes of product was sold, up from 25,454 tonnes three weeks ago. Whole milk powder eked out a 0.1 per cent gain to US$2,958 a tonne.

However, regular grade whole milk powder for next month shipping jumped 8.9 per cent to US$3,195 a tonne, according to AgriHQ dairy analyst Amy Castleton. This indicates "there is some strong short-term demand for whole milk powder," she said in a note.

At the latest GDT auction, rennet casein rallied 8.0 per cent to US$4,971 a tonne, while cheddar gained 1.3 per cent to US$3,663 a tonne, and anhydrous milk fat rose 1.2 per cent to US$5,709 a tonne.

Meanwhile, butter milk powder dropped 5.9 per cent US$2,441 a tonne, while butter slid 3.2 per cent to US$4,802 a tonne. The decline in butter was a surprise, according to Castleton, as it "had been expected to see the largest lift this week.

"Skim milk powder slipped 0.3 per cent to US$1,972 a tonne. Medium-heat skim milk powder to ship in October dropped much more than expected, Castleton said.

"However, prices did lift for contracts 3, 4 and 5, indicating there is stronger demand further out," she said.

For sweet whey powder and lactose, neither an index nor price was available.

The New Zealand dollar last traded at 67.35 US cents as of 3.41pm in New York, compared with 67.33 US cents at the previous close in Wellington. There were 126 winning bidders out of 191 participating at the 13-round auction. The number of registered bidders was 529, up from 524 at the previous auction.

"There were fewer buyers from North Asia at this event than at the July 18 GDT event, but the presence of buyers from South East Asia and Oceania, and from South America was strong," according to Castleton.