World dairy prices have fallen sharply, as increased production in New Zealand and Europe creates more supply than demand.
Global Dairy Trade, a bi-monthly auction of dairy, fell by 5.2 per cent Tuesday night following a 4 per cent drop earlier in the month.
John Droppert, industry analyst from Dairy Australia, says the fall won’t affect this seasons prices for farmers, but it could temper next season’s opening milk price, which starts in July.
“You know, it is certainly going to factor into their (milk companies) outlooks for the coming season,” he said.
“But there are things to be positive about, in terms of the exchange rate coming off significantly in the last 12 months.
“While I think this puts pressure on farm gate prices and the likelihood of farm gate prices matching this level next year, we’re certainly not at the stage where you’d be panicking about it.”
Individual product prices fell across the board.
Butter fell 4.4 per cent, cheddar was down 4.1 per cent, whole milk powder fell 5.8 per cent and Skim Milk Powder dropped 1.7 per cent.
Source: ABC Rural