Dairy prices fall 5 percent in Global Dairy Trade auction

The average price dipped to US$3045 per metric tonne.
The average price dipped to US$3045 per metric tonne. Photo credit: Getty

Dairy prices fell 5.1 percent overnight in the latest Global Dairy Trade auction.

The average price dipped to US$3045 per metric tonne (MT), down from US$3201/MT in the previous auction.

Anhydrous milk fat was up 3 percent, to US$3994/MT, and the price for lactose rose 5.7 percent, to US$1349/MT

All other commodities were down.

Whole milk powder fell 7.5 percent to US$3003/MT, butter milk powder was down 6.5 percent to US$2259/MT, cheddar dropped 5.3 percent to US$3568/MT, skim milk powder was down 4.6 percent to US$2583/MT, and butter fell 2.8 percent to US$3438/MT.

ASB senior economist Chris Tennent-Brown said the dip in prices was "disappointing to see".

The overnight drop came after overall prices surged by 8.3 percent in early July before slipping back 0.7 percent in the previous auction two weeks ago.

"We had been factoring some retracement of the large jump in prices that we saw in July, and this is happening," Tennent-Brown said in ASB's latest commodity report released on Wednesday.

"We attributed some of the strength in near-term prices back in July to buyers adding some padding to stocks as a risk management strategy given the acceleration in global COVID-19 cases and increased potential for logistics disruption. That pressure seems to have reduced, with near-term contract prices around $3,050 to $3,100 per tonne."