Average prices paid at today’s Fonterra dairy auction fell by 8.4%, compared with those recorded at the event held on July 15, with an average selling price of $3,025 per tonne.

Today’s result comes on the back of a 8.9% fall at the last auction, prior to that nine of the last 10 auctions in a row have seen price falls since February. It is important to note that this the previous auction of July 15 have seen the most significant falls since April 1 where the trade was also down over 8% on March figures.

Whole milk powder and anhydrous milk fat were among the products affected by the change in market conditions, with price falls of 11.5% and 6.0% registered respectively.

ICOS Dairy Policy Executive T J Flanagan said that commodity markets will always demonstrate the highest levels of volatility. “And this can work in both a positive and negative sense. Prices paid for milk powders and butter will always respond much more rapidly to changes in market conditions than is the case with cheese.”