Fonterra removed large tonnages of whole milk powder (WMP) from GDT auctions in recent times, but that did not stop GDT prices from falling 3.8% average across all contract periods and powder grades.
Skim milk powder (SMP) also fell 5.2% to below US$3000/tonne and has opened up a $750 gap with WMP.
Lactose was down 8.9%, butter 0.8% and anhydrous milk fat (AMF) down 0.3%. The only gain was for cheddar at 1.3%.
After commenting that powder prices seemed to be in free fall, NZX dairy analyst Stuart Davison said prices were coming off highs and some correction was always to be expected.
“Overall, this result will have a negative effect on the farm gate milk price forecast and will put a dampener on the season’s outlook for farmers,” Davison said.
Buyers may be betting on high farm gate prices, causing NZ milk production to increase and/or sitting out of the auction at this time.
