Prices plummet 8.5pc in Global Dairy Trade auction

Global dairy prices have plunged 8.5 per cent overnight, while the volume traded rose by 13.5 per cent.

It's the fourth - and biggest - consecutive decline in the twice-monthly auction.

Whole milk powder (WMP) - which has the biggest influence on Fonterra's farmgate milk price - fell 6.5 percent, on the back of a 4.4 per cent decline in the previous event, to an average US$3916/MT.

WMP has now dropped US$841/MT since reaching a record high of US$4757/MT on March 1, 2022.

Skim milk powder (SMP) - Fonterra's second biggest reference product - followed suit with a 6.5 per cent drop, after falling 4.2 per cent in the previous event, to an average US$4130/MT. SMP remains ahead of WMP in value for a third time.

The biggest drop came from butter, which fell 12.5 per cent to an average US$5807/MT. Butter has now dropped over US$1200/MT, from a record high of US$7048/MT on March 1, 2022.

Anhydrous milk fat slid 12.1 per cent to an average US$6008/MT, cheddar lost ground to the tune of 8.6 per cent, selling for an average US$5652/MT; and butter milk powder dropped 6.1 per cent to an average US$4203/MT.

25,163 MT of product was purchased by 107 successful bidders, compared to 22,179 MT and 115 winning bids at the previous event.

Fonterra in February lifted its 2021/22 forecast farmgate milk price range to NZ$9.30 - $9.90 per kgMS, up from NZ$8.90 - $9.50 per kgMS.

This increased the midpoint of the range, which farmers are paid off, by 40 cents to $9.60 per kg, which would be the highest ever paid.