Dairy prices edge ahead at latest auction

Dairy prices have continued to rise for the sixth consecutive time, edging up 0.6 per cent at the latest Global Dairy Trade auction.

The last time prices fell was on March 7 when they dipped by 6.3 per cent. At the previous three GDT auctions, the price index has climbed by over 3 per cent each time.

Prices slipped 2.9 per cent overnight for New Zealand’s main dairy export, whole milk powder (WMP), which had been expected to drop because 1800 tonnes more was on offer.

As New Zealand’s milk season draws to a close, the average price across all products is now $US3395 per metric tonne.

Federated Farmers dairy group chairman Andrew Hoggard said he expected prices would remain stable in the near future.

‘‘Considering the way prices have gone up and down over the past few years, that would be a good thing.’’

Farmers were generally faring well as they prepared for the next season, although in some regions heavy rain could make for a difficult winter if temperatures plummeted. ’’One farmer told me he has received almost the average annual rainfall for his region, and it’s only halfway through the year. But farmers are mostly well placed, it’s just a roll of the dice with the weather,’’ Hoggard said.

Milk output from New Zealand is expected to lift this season and Fonterra has already made a small upwards revision in the volume of WMP expected to be sold on GDT next season. It had expressed concerns about rising global production, although Europe is showing caution after sharp price fluctuations while the United States focuses on the domestic market.

Higher dairy prices have helped lift New Zealand’s terms of trade to the highest level since 1973.