2 Dec 2010

Dairy auction prices edge up

12:22 pm on 2 December 2010

Dairy prices edged up in Fonterra's latest global online auction on Thursday morning.

The average sale price for all products rose 1.6% to $US3594 per tonne.

Dairy prices were very volatile earlier this year, but they have smoothed out in recent auctions.

The average whole milk powder price rose 2.6%, skim milk powder rose 0.5% and anhydrous milk fat edged up 0.3%.

Prices for butter milk fell 2.7%.

The auction is held fortnightly.

BNZ economist Doug Steel says demand may be due to customers buying dairy products now, in case the La Nina weather pattern results in drought, which would lower milk production and push prices higher over the coming months.