Dairy product price index dips for sixth time in seven auctions

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The dairy product price index slipped at the Global Dairy Trade auction, moving lower for the sixth time in the past seven auctions, even as whole milk powder gained.

The GDT price index slipped 0.2 percent from the previous auction two weeks ago. The average price was US$3,255 a tonne, compared with US$3,253 a tonne two weeks ago. Some 34,410 tonnes of product was sold, down from 34,969 tonnes two weeks ago.

Whole milk powder climbed 2.1 percent to US$3,100 a tonne.

"Market expectations were for milk powder prices to be stronger, and for milk fats to soften," NZX dairy analysts Robert Gibson and Amy Castleton said in a note. "This is largely what has happened with the exception of skim milk powder."

"Average prices were largely held up by strong demand for whole milk powder, which should continue to help support farm-gate milk prices in New Zealand, despite New Zealand milk supplies continuing to lift for 2019-20," according to Gibson and Castleton.

At the latest GDT auction, rennet casein sank 8.1 percent to US$6,348 a tonne, while lactose dropped 3.7 percent to US$740 a tonne.

Anhydrous milk fat declined 3.7 percent to US$5,061 a tonne, while butter slid 3.4 percent to US$4,025 a tonne, and skim milk powder slipped 0.3 percent to US$2,478 a tonne.

Meanwhile, cheddar rose 0.8 percent to US$3,857 a tonne.

Butter milk powder was not offered at this event.

For sweet whey powder, no product was offered or sold, or no price was published for the last event, or on both of the two previous events.

The New Zealand dollar last traded at 64.19 US cents as of 3.11pm in New York, compared with 64.11 US cents at the previous close in Wellington.

There were 140 winning bidders out of 191 participating at the 12-round auction. The number of registered bidders was 507, down from 511 at the previous auction.