Source: Radio New Zealand
The average price at the latest global dairy auction fell 2.7 percent. AFP / William West
Global dairy prices have fallen again amid ongoing geopolitical tensions.
The average price at the latest auction, held fortnightly, fell 2.7 percent to US$4143 (NZ$7025) a tonne.
It comes after prices dropped 3.4 percent at the last auction, the first dip of the year.
The price of wholemilk powder, which influences farmer payouts, fell 0.6 percent to US$3666 a tonne.
Prices for other products were mixed.
Butter prices fell 7.9 percent and mozzarella fell 3.1 percent. Cheddar was up 1.1 percent and skim milk powder rose 3.2 percent.
In a note, NZX head of dairy insights Cristina Alvarado said milk powders showed relative resistance, though this was offset by a sharper-than-anticipated correction in milk fats.
“The scale of these declines exceeded forecasts and reflects persistent global supply availability combined with competitive pricing pressure, particularly from US CME butter, which continues to undercut international markets,” she said.
“European pricing remains relatively flat, supported by strong seasonal milk flows and steady cream availability, further reinforcing downward pressure on fat values.”
Alvarado said weakened demand for anhydrous milkfat – which fell 9.6 percent – highlighted the lack of urgency from buyers at current price levels.
She said despite the seasonal decline in New Zealand milk production approaching, there was plenty of supply globally.
Who was buying had noticeably shifted, with North Asia re-emerging as the dominant buyer.
However, ongoing geopolitical tensions linked to the conflict involving Iran are contributing to elevated freight, insurance, and input costs.
“Disruptions around the Strait of Hormuz and sustained high oil prices are feeding uncertainty into buyer behaviour, with many opting to delay procurement in anticipation of improved cost conditions and clearer logistics,” Alvarado said.
“Overall, Event 402 reflects a market still navigating the interplay between sufficient supply, cautious demand, and external geopolitical pressures, with milk fats bearing the brunt of current downside risks.”
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
