Dairy Prices Decline for Fourth Consecutive Auction, Whole Milk Down 2.3%

The latest Global Dairy Trade (GDT) auction revealed a further decline in dairy prices, marking the fourth consecutive drop. Prices fell by an average of 1.6% across all products, following previous declines of 0.8% at the last auction and 4.3% and 0.3% in prior weeks. This trend is critical for producers and consumers alike, as it reflects shifting supply and demand dynamics in the dairy market.

Whole milk powder, a key product for the New Zealand-based dairy cooperative Fonterra, experienced a notable decrease of 2.3%, settling at an average price of US$3,696 per metric ton. This reduction significantly impacts Fonterra’s farmgate milk price, which is closely tied to the market performance of whole milk powder.

Skim milk powder, which ranks as Fonterra’s second-largest reference product, saw a smaller decline of 0.5%, bringing its average price to US$2,599 per metric ton. Meanwhile, butter milk powder also faced a drop of 2.3%, averaging US$2,768 per metric ton, while butter prices fell by 3.0% to an average of US$6,712 per metric ton.

The ongoing downward trend in dairy prices is noteworthy given the current market conditions. The cumulative effect of these price reductions may influence consumer costs and production decisions in the dairy sector, particularly in regions heavily reliant on exports.

The GDT auction results, which reflect global dairy market trends, are crucial for stakeholders across various sectors. Changes in these prices can have a ripple effect on the agricultural economy, affecting everything from farm income to retail pricing.

As the dairy market continues to evolve, producers, traders, and consumers will be closely monitoring future GDT auctions for signs of stabilization or further fluctuation in prices.