Dairy prices have had their biggest fall in four months in the latest global auction.
Prices of butter, cheese and wholemilk fell in the latest auction. Photo: 123RF
The average price at the overnight auction fell 3.6 percent to $US3924 a tonne, the lowest level since early April. It was the sixth consecutive fall in auction prices, and compared with a 1.3 percent fall in the previous auction.
"Bidding round information shows the lacklustre desire to pay the premium prices we have seen over the first six months of 2021," NZX dairy analysts said in a commentary.
The price of wholemilk powder, which strongly influences the payouts for local farmers, fell 3 percent to $US3864 a tonne.
Prices for other products sold were lower across the board, with sizeable falls for butter, cheese, and skim milk powder.
Jarden Securities' head of derivatives Mike McIntyre said the drop was a surprise, although the broad view was that there is still good demand for New Zealand product, especially wholesale milk powder.
"A considerable element of last night's auction was easing skim milk powder prices, the move potentially reflective of the growth seen in offshore markets and more especially the US.
"New Zealand has commanded a premium over product from other origins, but that trend isn't carved in stone."
"The other side to the coin is the slightly weaker kiwi [dollar] may offset a little of last night's dip when it comes to calculating the milk price," he said.
All the major milk producers have signalled a forecast payout for the season of around $8 a kilo of milk solids.
Even allowing for recent falls, global prices remain close to seven-year highs.