Prices at the auction fell 3.1% leaving the AgriHQ farmgate milk price at $5.26/kg MS. Fonterra’s forecast price is $4.60.
Market expectations for dairy commodity prices for the rest of this season had eased, AgriHQ dairy analyst Susan Kilsby said.
Prices were still expected to trend up in coming months but the rate of growth had slowed.
A fortnight ago whole milk powder was expected to reach US$3000 a tonne by the end of the year but that price was now likely in May.
“The slowdown in the recovery of the dairy markets will be disappointing for dairy farmers whose cashflows have been squeezed by two seasons of low milk prices.
“While the market had generally eased, the results of the latest GDT auction still came as a surprise,” Kilsby said.
The NZX dairy derivatives market had predicted both WMP and skim milk powder prices would lift again.
Fonterra’s milk intakes for September were 9% below year-ago levels.
“The news of the sharp fall in milk supply should have supported a lift in GDT prices, however that was not the case,” Kilsby said.
GDT price indexes were down for the main products traded but some price gains were recorded.
The price indices for WMP and SMP dropped 4.6% and 4.5% respectively. The butter price index recorded the largest fall at 11.1%. The cheddar price index was down 2.2% and lactose fell 3.8%.
Gains were made in the remaining indices with anhydrous milk fat up 2.4%, rennet casein up 2.1% and butter milk powder lifting by 3.2%.
