Dairy prices take a dip in latest global dairy trade auction

Dairy prices dipped 1.1 per cent in the latest GlobalDairyTrade auction to reach an average price of US$3465 (NZ$4951) per tonne.

The benchmark whole milk powder prices dropped 1.5 per cent, skim milk powder (SMP) lifted 3.6 per cent, rennet casein was down 10.5 per cent, cheddar prices were up 3.1 per cent and butter remained unchanged.

Federated Farmers dairy chairman Chris Lewis said apart from the 2.7 per cent lift in the last auction, the consistency of and stability of dairy prices since February would have pleased farmers because it allowed them to more confidently forward plan their business. ‘‘At the moment we just have little ripples and we like little ripples.’’

Dairy price volatility in more recent times that saw prices rise and then crash just as quickly made that more difficult to do, he said.

The movements of the NZ/US exchange rate were having a greater effect on dairy prices at the moment than the slight fall in milk prices.

ASB Bank senior rural economist Nathan Penny said in the bank’s latest Rural Economic Note that the fall in the dollar ‘‘more than trumps’’ the fall in milk price.