20 Aug 2014

Dairy prices fall again - fractionally

10:21 am on 20 August 2014

Dairy prices have again dropped in Fonterra's international dairy price auction overnight, but by significantly less than in recent weeks.

dairy milk truck.

Photo: PHOTO NZ

Average dairy prices have dropped point six (0.6) of a percentage point.

In the last fortnightly auction prices fell 8.4 percent - a 40 percent drop since February.

Fonterra has cut its forecast payout to farmers from $7 per kilogram to 6 on the back of the falling international demand.

That has been attributed to a lack of Chinese buyers, who overstocked on milk powder last year because of concerns Chinese regulation of infant formula could restrict supply.

Hayley Moynihan, a senior dairy analyst at Rabobank, says while whole milk prices rose by 3.4 percent, prices for other products are still falling dramatically.

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