Photo: 123RF
Prices have fallen in the latest global dairy auction overnight.
The average price at the auction fell 1.6 percent to US$3921 (NZ$6760) a tonne, with the Global Dairy Trade price index now at its lowest level in a year.
It followed the 0.8 percent fall in the previous auction a couple of weeks ago, and a 4.3 percent drop a month ago.
The price of wholemilk powder, which strongly influences the payouts for local farmers, fell 2.3 percent to US$3696 a tonne.
Prices were generally weaker for most products, including a 3 percent fall in butter, a 0.5 percent fall in skim milk powder, and an 11.8 percent drop in mozzarella.
Prices increased for anhydrous milk fat (concentrated milk fat) and cheddar.
NZX dairy analyst Rosalind Crickett said the soft result was in line with the market's prior expectations a amid strong milk supply.
"The global milk production picture remains strong for this time of year, with recent data out of NZ, the US, EU and Argentina showing robust year-on-year growth in both tonnage and milksolids," Crickett said.
"This has naturally put downward pressure on milk powder pricing."
Crickett said "ample cream supplies" weighed on butter prices, with New Zealand butter facing competition from European and United States products.
"Casting a forward glance to the coming events, the lower prices may generate greater buying activity from other regions as seasonal stockpiling begins ahead of year-end and new year festive seasons," she said.
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