The average price at the fortnightly sale fell 4.1 percent US$4360 a tonne, after falling 1.3 percent in the previous auction.

The price of wholemilk powder, which strongly influences the payouts for local farmers, was 3.3. percent lower at US$3961 a tonne – the first time price have below the $4000 mark since October.

NZX analyst Amy Castleton said there was a distinct lack of demand in the auction.

“Demand for dairy does seem to be easing off right now.

“We’ve now seen declines at [the global dairy trade auction] for seven of the last eight events.”

Whether this was a longer term trend was not quite certain, given the time of year, she said.

“July is a typically quiet time of year – the North Hemisphere’s on their summer holidays and the Southern Hemisphere is in the depths of winter.”

High inflation and rising interest was also having an effect as it had reduced demand for what was considered a luxury product in some markets, Castleton said.

Looking ahead, Castleton said global milk supply was low which would continue to support commodity prices.

Prices for other products, including butter and skim milk powder, also fell at the auction.

However, the price of cheddar cheese gained 1.4 percent to US$4908.

Source : RNZ July 6th 2022