Strong production, tested demand send milk prices crashing
Strong global milk production and rebalancing of demand among key buyers has delivered one of the biggest drops in whole milk powder prices in recent years.
Fonterra's Global Dairy Trade-trade weighted index, which covers a range of 30 products and contract periods on offer, dropped 6.4%, with an average selling price of US$2,618 per tonne.
It was the third consecutive fall in the index at the fortnightly auctions. So far this year there have been only two rises out of the 10 auctions.
Prices fell for most dairy products on offer, with the largest decline seen in anhydrous milk fat, which fell 11.9%. Skim and milk powder also posted hefty falls, while rennet casein was the only one of the main products to manage a lift.
SMP dropped 5.4% to US$2,573/tonne while WMP dropped 9% to US$2546/tonne.
The next GDT auction is on June 5.
