6 Mar 2014

Dairy prices tipped to keep dropping

8:12 am on 6 March 2014

A dairy expert says global dairy prices are expected to continue gradually falling later this year, after their second consecutive drop in the fortnightly auction on Wednesday.

The GDT price index fell by 4 percent, with the price of whole milk powder dropping by 5.8 percent and skim milk powder down 3.9 percent.

Hayley Moynihan, director of dairy research for New Zealand and Asia at Rabobank, says changing seasons across the world means there will still be plentiful supply for at least the next few auctions.

She says prices will continue to ease until the middle of the year and more product will be available on the market because at this time of year New Zealand's European competitors are entering their spring period.

More milk was also sold in the latest auction, with volumes up 18.8 percent and more than 41,000 tonnes sold.

Ms Moynihan says the supply of whole and skim milk powders was particularly plentiful, which reflects a better production season in New Zealand, particularly compared to last summer at the height of the drought.