The AgriHQ Seasonal Farmgate Milk Price fell by 1c/kg of milksolids to $4.50.
Fonterra’s last week cut its milk price forecast from $4.70 to $4.50/kg MS.
The average price for products sold at the auction was US$2515/t.
Milk powder and anhydrous milk fat prices were weak but cheese prices firmed for a second time.
Once again the auction took just over two hours to complete but the number of successful buyers increased by nine to 117.
The volume of product traded was 7% greater than at the previous auction, with 27,639t of dairy products changing hands.
AgriHQ dairy analyst Susan Kilsby said “The increase in the number of companies buying product on GDT indicates demand is beginning to improve but this increase in demand is not yet being reflected in the prices.
“The volume of product on offer was greater than the previous auction as Fonterra is now sellling next season’s product in the later dated contracts.”
The fall in milk powder prices overnight was the primary driver for the 1c reduction in the AgriHQ Seasonal Farmgate Milk Price.
NZX Dairy Futures prices had also dropped a little since the previous auction but that fall had a negligible impact on the AgriHQ prediction.
Skim milk powder prices recorded the largest fall with the SMP Index dropping 7.5%.
Despite the sharp fall in price Fonterra-supplied SMP still traded at a higher price than equivalent product offered by the European dairy company, Arla Foods.
“It’s a buyers’ market for SMP at present with strong competition between NZ and European suppliers who are operating in the Asian and Middle East markets.
“A better than expected end to the 2014-15 milk production season means NZ dairy companies still have some current season product to sell while European milk production is heading towards its seasonal peak.”
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