Global dairy prices have fallen for the first time this year but remain near record levels.
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The price of wholemilk powder, which strongly influences the payouts for local farmers, was down 2.1 percent in the latest global auction. Photo: RNZ / Rebekah Parsons-King

The average price at the fortnightly global dairy auction fell 0.9 percent to US$5,039 a tonne, after rising 5.1 percent in the previous auction.

It was the first decline in prices since late December, and followed a series of auctions which averaged 4.5 percent gains.

NZX dairy analysts said the dip was not unexpected.

“A correction has always been a good possibility considering how quickly we have marched up to current prices, and this minor price correction could be seen as a good thing; it could have been much harsher.”

The price of wholemilk powder, which strongly influences the payouts for local farmers, was down 2.1 percent to US$4,569 a tonne, as buying demand from the Middle East and Africa eased from recent highs.

Prices for other products sold were mixed, with a fall in butter but a rise for skim milk powder and cheese.

The amount sold was down 7.4 percent on the previous auction.

In the past month dairy companies have raised their forecast payout to farmers for the current season to record highs around $9.50 a kilo of milk solids.

At the midpoint of the year, the all-milk price forecast for 2022 is a whopping $26.20 per hundredweight (cwt), according to the June 2022 USDA/ERS Livestock, Dairy and Poultry Outlook report.

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