Dairy prices down at latest GlobalDairyTrade auction
Dairy prices have fallen at the latest global auction.
The GlobalDairyTrade Index (GDT) fell 3 percent to US$2,880.
Whole Milk Powder, which is New Zealand's most important dairy export, fell 3.8 percent to an average price of US$2,681.
The Skim Milk Powder Index has fallen 3.9 percent.
Butter Milk Powder gained 9.3 percent and the Butter index slipped by just 0.3 percent.
Last month Fonterra lifted its forecast payout for this season to NZ$5.25 per kilogram of milk solids. It is also forecasting earnings per share for the current financial year between 50 and 60 cents.
That would mean a total payout available to farmers in the current season of between $5.75 and $5.85, before retentions.
Dairy New Zealand estimates the average break-even point is $5.05.
Fonterra Chairman John Wilson warned last month that the high dollar was a problem, because Fonterra sells its products in US dollars.
He said 'While we have seen some improvement in GDT auction prices recently, the high New Zealand dollar-US dollar exchange rate is offsetting some of these gains".
The New Zealand dollar was trading at 72.45 US cents at 5am.
The Kiwi reached a fresh 40-year high yesterday against the British Pound and was trading at 56.83 pence this morning.
It was trading at 94.30 Australian cents.
Last month Fonterra also announced a big rise in profit for the 2015/16 financial year.
The after-tax profit of $834 million was 65 percent higher than the 2014/15 net profit of $506 million.
The final cash payout to farmers for the season totalled $4.30. That comprised a Farmgate Milk Price of $3.90 and a dividend of 40 cents per share.
The final payout for last season was below the average break-even point for Fonterra's 10,500 farmers.