Global Dairy Trade auction: Prices plunge 4.7 pc across the board

Dairy prices have taken another hit at the latest GDT auction. File photo / Christine Cornege

A week of bad news has continued for the country’s dairy farmers, with a significant fall in the latest Global Dairy Trade auction, held overnight.

Prices dropped 4.7 per cent across the board - the fourth consecutive decline – with the index falling 2.6 per cent on March 21, 0.7 per cent on March 7 and 1.5 per cent on February 21.

Whole milk powder, which peaked in March 2022 at US$4757/MT, plunged 5.2 per cent to an average of US$3053/MT.

This is the lowest the commodity has sat since November 2020.

Skim milk powder - Fonterra’s second-biggest reference product – dropped 2.5 per cent to an average of US$2579/MT.

The biggest percentage fall came from anhydrous milk fat, which dropped 7.2 per cent to an average of US$4736/MT, after a 3.8 per cent drop two weeks ago.

This is the second time the commodity has sat below the US$5000/MT threshold in two years, and the lowest since January 2021.

Butter and butter milk powder both experienced 3.3 per cent declines - with an average of US$4595/MT and US$2529/MT respectively.

Cheddar, which has bounced around in value a lot in the past few events, bucked the trend with a 3.8 per cent increase, to an average of US$4167/MT.

23,828 MT of product was purchased by 117 successful bidders, significantly less than the 26,795 MT and 122 winning bidders last time.

On Monday, Fonterra lowered its forecast farmgate milk price for the 2022/23 season from a range of $8.20 - $8.80 per kilogram of milk solids (kgMS) and a midpoint of $8.50, to a new range of $8.00 to $8.60 kgMS and a midpoint of $8.30.

Its forecast 2022/23 normalised earnings guidance is in a range of 55 to 75 cents.