The New Zealand Herald

Trade auction for dairy takes another fall

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The Global Dairy Trade auction has recorded another fall, making it eight drops in the last nine auctions, following a “bolt from the blue” 15 per cent jump back in March.

Prices across the board fell 2.9 per cent, in the seventh consecutiv­e negative result.

Whole milk powder — which has the biggest influence on Fonterra’s farmgate milk price — fell 3.8 per cent and over US$130/MT ($188) to an average US$3730/MT.

On the back of a 7 per cent drop two weeks ago, skim milk powder — Fonterra’s second biggest reference product — dropped a further 5.2 per cent and US$155/MT to an average US$2971/MT.

The biggest decline, however, came from lactose, which fell 8.9 per cent to an average US$1127/MT — although very little product was offered.

Cheddar, which slid 9.2 per cent in the previous event, rallied slightly to finish up 1.3 per cent and average US$4022/MT.

Butter, which had been hovering above the US$5000/MT mark earlier this year, softened a further 0.8 per cent to an average US$4419/MT, while anhydrous milk fat dropped 0.3 per cent to an average US$5615/MT.

Butter mIlk powder and sweet whey powder were not offered at this event.

The volume of product traded fell slightly from the previous event with a total of 22,405 MT of product sold to 111 successful bidders.

Fonterra chief financial officer Marc Rivers remained philosophi­cal about the result.

“It was a little bit disappoint­ing but not totally surprising,” he told The Country’s Jamie Mackay.

The Covid-19 Delta strain would have had an effect on the auction, Rivers said.

“No doubt there were a few things hanging on people’s minds…Covid’s certainly not over, the world’s got a lot to go through yet.” However, underlying demand at the consumer level continued to remain “pretty solid,” Rivers said.

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