After a positive lift earlier this month, prices have dropped in the latest Global Dairy Trade (GDT) auction, held overnight, with a 1.5 per cent decline across the board.
The unexpected downward shift followed the release of January milk production figures by Dairy Companies Association of New Zealand (DCANZ) yesterday evening, which showed a 1.9 per cent increase in milksolids, year on year, for the month.
That, combined with knowledge recent rainfall from Cyclones Hale and Gabrielle has set up pastures well, particularly in Waikato, for increased milk production towards the end of the dairy season, has given buyers confidence more product will be available than anticipated.
Add in ongoing and significant market volatility, and all of these factors did not make for a positive GDT.
Whole milk powder, which peaked in March at US$4757/MT, drove the overall index down with a 2.0 per cent drop, to an average of US$3264/MT.