News
04.02.2010
Milk prices continue to drop at Fonterra auction
Weaker dairy markets in Europe and the US have sent milk prices lower for a second month running at a Fonterra internet auction.
The New Zealand dairy giant said that the average price for whole milk powder sold at its latest globalDairyTrade auction fell by 1.6% to $3,256 a tonne.
The decline was particularly evident in the most distant contract, for delivery between August and October, which slumped by 6.7% to $3,287 a tonne, falling from a premium to a discount against the middle lot, which specifies delivery between May and July.
The pattern holds some echo to that in Chicago, where near-term milk lots have fared better this year, barely losing any ground, compared with those further away. Chicago's August milk contract has dropped 6%.
Chicago's decline has been blamed in part on US data last week showing a surprise rise in the number of heifers being kept by dairy farmers as future milk cattle.
In Europe, industry group DairyCo noted a 1.7% fall, to Ј1,130 a tonne, in the UK wholesale price of bulk cream last month, with the butter price falling by 3.6% to Ј2,700 a tonne.
'Positive result'
Paul Grave, the globalDairyTrade manager, said that the result of Fonterra's auction was "positive, given that over the last month dairy prices have been under pressure in Europe and the US".
He added: "It is encouraging to see that prices remain relatively stable in a range that is high by historic standards."
The price of anhydrous milk fat, a dairy byproduct used by bakers and ice cream makers, fell by 7.9% to $4,183 a tonne in the auction.
Agrimoney
