7 Mar 2012

Drop in dairy prices at Fonterra auction

5:01 pm on 7 March 2012

Dairy prices have fallen at Fonterra's latest global dairy auction.

The dairy cooperative's global dairy trade-weighted price Index fell 0.9% to an average selling price of $US3576 a metric tonne.

The price drop at the auction overnight on Tuesday is the third consecutive fall.

Prices slipped for almost all products, led by a 7.6% fall for milk protein concentrate.

In December, Fonterra lifted its forecast payout to between $6.90 and $7 a kilogram of milk solids for the current season, citing a modest improvement in dairy product prices at auction.

ANZ-National Bank rural economist Con Williams says prices may fall further if China's downgraded growth forecasts mean there's less demand for dairy.