Fonterra’s most recent dairy trade auction showed a 1.1% decrease in the overall auction index meaning average price for all products now stands at US$2,513/t, the lowest price since August 2009.

On a positive note cheddar, SMP (Skimmed Milk Powder), AMF (Anhydrous Milk Fat), butter, casein and BMP (Butter Milk Powder) showed an increase in price index compared to the previous auction.

In contrast, the Fonterra price index for WMP (Whole Milk Powder) declined. WMP averaged $2,229/tonne across all contracts, a decrease of 7.1% on the last auction.

At the auction the average weighted butter price was up 7.3% from the last auction, at $2,849/tonne. The weighted SMP price was also up 5.7% from the previous auction, at $2,423/tonne.

Prices for cheddar were up 5.2% on the last auction, at $3,017/tonne.

The previous trading, on November 18, was also back, by 3.1%.The next trading event is December 16.

Fonterra is currently holding its 2014-15 forecast milk price at $5.30/kgMS (kilos of milk solids), despite the recent fall in GDT price.

However, the processor is expected to revise this on December 9, according to DairyCo.

On the world market, the Milk Market Observatory has said prices expressed in US$ have generally trended downwards in the EU and Oceania in the last two weeks.

It says in butter prices in the EU have remained rather stable and the rest of the products have decreased ranging from -2.6% to -3.5%. In Oceania, price drops have shown similar magnitudes, ranging from -2.5% for cheddar to -3.4% for butter.

However the observatory notes butter and cheddar prices have trended upwards again in the US (+ 9.2% for butter), while WMP prices have remained stable and SMP prices dropped by 3.2%.