Dairy product prices fell again at the most recent Fonterra Global Dairy Trade (GDT) auction.
The event represents the tenth negative auction for prices in a row and the GDT index is now over 50% lower than the highs seen in February 2014.
Average prices paid at the auction fell over another 9.3% on the last event held two weeks previously which itself was down over 10%.
- AMF index down 11.7%, average price US$2,253/MT
- Butter index down 6.1%, average price US$2,293/MT
- BMP index down 5.1%, average price US$1,700/MT
- Ched index up 0.2%, average price US$2,663/MT
- LAC index unchanged, average price US$535/MT
- RenCas index down 2.7%, average price US$5,289/MT
- SMP index down 14.4%, average price US$1,419/MT
- WMP index down 10.3%, average price US$1,590/MT
At world level, milk production increased by some 825 000 t in the first 5 months of the year, mainly due to the US, according to latest figures from the Milk Market Observatory (MMO).
However, it says latest figures about US milk production in June shows a less dynamic increase (+ 0.7%).
Milk production is also increasing in China, Russia and Belarus, it says.
Meanwhile the MMO says world exports are decreasing, reflecting demand slow down.
The European Milk Market Observatory meet in Brussels yesterday (Tuesday) and officials from the European Commission are not likely to paint a pretty picture of the dairy market.
According to latest data from the Commission quotes for Whole Milk Powder (WMP) have fallen by 5.7% in the last two weeks alone to $2,480/t. Quotes at this level are now some 42% behind those of 12 months ago when WMP was trading as high as $3,860/t.
Quotes for the product are no at levels not seen since dairy prices hit rock bottom in April 2009. Despite the falls in Europe prices down under have taken a even greater hit with quotes in Oceania down 11.7%, according to the Commission data.
Quotes for EU Skimmed Milk Powder (SMP) have faired little better in the last two weeks down 3.6% to $1,903/t. When compared to quotes of $4,290/t offered 12 months ago they have fallen by more than half. Similar to WMP, quotes have taken a much larger hit in Oceania down 11% in the last two weeks.
Falls in quotes for butter have been smaller but still significant. In the last two weeks European butter quotes have fallen by 2.8% to $3,234/t. Meanwhile falls in New Zealand and Australia have also been high at 3%. Compared to the same month last year quotes for butter in Europe are 33% lower.