Prices 'better than expected' at global dairy auction

Prices had an overall rise of 1 percent.
Prices had an overall rise of 1 percent. Photo credit: Getty

Dairy prices rose slightly overnight in the latest Global Dairy Trade auction, up 1 percent to US$2907 a ton.

The increase follows a 0.8 percent fall in the previous auction.

The price for whole milk powder (WMP) fell 0.5 percent, with prices down for butter and cheddar too.

Skim milk powder, lactose and anhydrous milkfat prices were up.

NZX dairy derivatives analyst Amy Castleton said the overall lift of 1 percent was "better than expected". 

"There was some good demand from China for whole milk powder, which seems to have stopped the WMP price index sliding too far," Castleton told Newshub.

"Nearly all of the WMP on offer was sold, showing there is demand for the commodity, although buyers are not necessarily willing to pay higher prices for it."

She said a move by Fonterra to add extra WMP to the market at the end of last week was likely to "have buyers thinking hard about how much they are willing to pay", due to the fact it signalled there was more New Zealand WMP around than previously thought.

"The lift in prices for skim milk powder and anhydrous milkfat is also a good sign, with indications that some regions are starting to come back into the market," Castleton said.