Fonterra auction prices fall 9.3% from Dec, 54% from July

The global financial crisis continued to churn New Zealand's dairy industry, with figures from Fonterra's latest internet auction showing a 9.3% decrease in whole milk powder prices from the previous monthly event in December. Prices on Fonterra's 'globalDairyTrade' internet auctions have now fallen 54% since July in US dollar terms. The average price for the January auction was US$2,017 per tonne of whole milk powder. "This result reflects current trading conditions," Fonterra's Managing Director of GlobalTrade Kelvin Wickham said. "Dairy prices have fallen as a result of a cyclical lag between supply and demand responses, though this has been accelerated by the demand downturn resulting from the global financial crisis and recession," Wickham said. "Still, the spot price increase (1.3% above the December session) is encouraging and we hope this is a sign of things to come. Our own supply and demand analysis indicates that we are near the bottom of the price cycle. While global inventories still need to be worked through, the current price levels represent excellent buying." For further news on the dairy industry see agridata.co.nz.