The latest Global Dairy Trade (GDT) auction, hosted by Fonterra, fell 3.6% to a weighted average of $2,620/tonne.
The average price for all products across all contracts now stands at US$2,620/tonne.
Back in March 2014 the equivalent figure was $5,000.
Whole Milk Powder (WMP) averaged $2,446/tonne across all contracts, a decrease of 4.3% on the last auction. The weighted (Skimmed Milk Powder) SMP price was down 7.8% from the previous auction, at $2,253/tonne. Significantly, the average price for UK SMP was $1,960/tonne.
The average weighted butter price was down 6.6% from the last auction, at $3,026/tonne while the price for Cheddar was up 2.7% on the last auction, at $2,888/tonne. The AMF (Anhydrous Milk Fat) price increased by 2.3% from the previous auction, to an average of $3,744/tonne.
BMP (Butter Milk Powder) prices increased by 2.1% to $2,208/tonne and prices for Casein averaged $6,949/tonne, down 0.6% from the previous auction. No Whey Powder was traded.
Following the likely rebalancing in the previous two auctions, DairyCo analysts believe the most recent fall could be down to the increase in supply offered by Fonterra. The New Zealand dairy cooperative increased the amount of WMP (up 9.6%), SMP (up 9.7%) and butter (up 9.3%) it offered to the auction.
Meanwhile, the USDA has cut its 2015 US milk production forecast as dry conditions are hampering yields in some Western states. The forecast now stands at around 92.5 billion litres, down 0.5% from last month’s prediction. As a result, expected year-on-year growth has fallen to 1.9% from 2.5%.
In a similar vein milk production in New Zealand fell by 6% in February, compared to the previous year. Drought has been impacting on the country’s grazing conditions as milk production moves towards the seasonal trough. However, UK milk deliveries ended the 2014/15 milk year at just under 14.4 billion litres, up 5.2% from last year. Most of this increase was seen between April and November, with production growth slowing later in the year as lower farmgate milk prices began to bite.