AFTER A 30 per cent rise since July, milk prices have fallen back in Fronterra’s Global Dairy Trade Auction.
The New Zealand dairy giant holds regular auctions of a range of dairy exports that are influential on world and domestic prices.
The GDT price rose 30 per cent over the last two monthly auctions, leading to milk price rises for New Zealand and Victorian dairy farmers above the crucial 50 cent per litre milk price (subject to lots of conditions on butter fat and seasonal supply quotas, etc).
But yesterday’s auction led to a three per cent price drop.
Dairy exports are so important to New Zealand that it led to a drop in the NZ dollar against the greenback.
Whether this leads to a milk price drop to dairy farmers is yet to be decided by the boards of Fronterra, Murray Goulburn and major dairy exporters which have, over the past year, been more prepared to protect their profit margins than dairy farmer income.