International dairy prices fell in this month’s first Global Dairy Trade auction as demand remains subdued.
The GDT Price Index, which covers a variety of products and contract periods, dipped 0.4 per cent, with an average selling price of $2,345 per tonne, in the auction held July 5.
Whole milk powder, which makes up the bulk of the auction, fell 1.6 per cent to $2,062 per tonne.
“Global demand for milk powder remains subdued as most buyers have sufficient stocks on hand to meet their immediate requirements, therefore have little urgency to buy right now,” said AgriHQ dairy analyst Susan Kilsby.
The slide in prices will disappoint New Zealand farmers, the majority of whom are already operating below break-even.
Until recently, dairy was the backbone of the island nation’s economy, representing around 25 per cent of exports. But dairy prices have dropped sharply from their record highs in 2013, due to China’s economic slowdown and global oversupply.
The Global Dairy Trade auctions are held twice a month, with the next one scheduled for July 19.