Photo: RNZ / Rebekah Parsons-King
Prices have fallen yet again at the global dairy auction overnight, with prices at their lowest level in more than two-and-a-half years.
The average price at the overnight auction fell 1 percent to US$3289 (NZ$5241) a tonne.
It follows the 3.3 percent fall in the previous auction a fortnight ago.
Prices have fallen in most auctions this year and the global dairy trade (GDT) price index is now at its lowest level since November 2020.
The price of wholemilk powder, which strongly influences the payouts for local farmers, fell 1.5 percent to US$3100 a tonne.
Of the other products offered, cheddar fell more than 10 percent, while butter fell 2.7 percent and skim milk powder eased 0.6 percent.
In a report, NZX dairy analyst Alex Winning and dairy economist Amy Castleton said market sentiment had not changed and demand remained soft.
"Buyers are getting what they need but aren't willing to pay more than they need to. No one is stocking up in fear they won't be able to get product in a few months' time," NZX said.
South East Asia continued to be the lead buyer at GDT events, it said.
"North Asia is buying, but not exactly pushing itself. Buying from this region continues to seem to be hand to mouth - just keeping things flowing rather than adding in any extra product," the report said.
There were also signs that milk supply was slowing, particularly in the Northern Hemisphere, but it had yet to show in the market, NZX said.
"All in all, this result shouldn't be much of a surprise to the market," it said.
"It's likely prices will continue to slowly soften like this going forward, as there just isn't much in the market to support any increases."
