Global Dairy Trade confirms continued negative momentum as key commodities, including butter and cheddar, register significant losses.
The global dairy market experienced yet another significant blow as prices continued their sustained downward slide at the latest auction. This result solidifies bearish sentiment across the industry, forcing dairy producers and processors worldwide to reassess near-term revenue forecasts. For major exporting regions, particularly New Zealand, the results present a tough outlook as the focus commodity, wholemilk powder (WMP), led the value erosion.
The benchmark commodity, WMP, which is instrumental in determining farmgate payouts for many international farmers, fell by a notable 2.7 percent. This pulled the price down to $3503 per tonne. This movement is crucial for dairy economics and demonstrates that despite seasonal shifts, underlying soft demand is overriding supply constraints, maintaining downward pressure on essential milk powders.
The weakness extended significantly into the fat and cheese categories. Butter prices tumbled by more than 4 percent, confirming ample supply across key butterfat regions and a lack of aggressive buying interest. Furthermore, cheddar prices took the steepest hit, registering a sharp decline of 6.6 percent, signaling challenging conditions for global cheese trade flows and manufacturing margins.
While most products saw losses, skim milk powder (SMP) managed to hold firm, trading relatively flat at the event. This slight stability in the non-fat component provided a minimal buffer against the widespread price falls. Industry sources, including NZX head of dairy insights, confirm that buyers remain cautious, executing purchases strictly on a needs basis without chasing higher volumes or future contracts.
The consecutive declines reinforce the message of market caution for international dairy trade stakeholders. The collective drop suggests that global supply remains comfortable relative to current demand, particularly from Asian buyers. Analysts warn that this sustained correction phase will continue to challenge pricing expectations for the coming peak production season, requiring dairy manufacturers to focus on risk management.
Source: Get the complete market details from Radio New Zealand here: https://www.rnz.co.nz/news/business/577866/dairy-prices-continue-downward-slide
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