Dairy product prices have fallen at Fonterra's GlobalDairyTrade auction, declining for the sixth time in nine auctions, amid bets on sufficient supply.
The GDT price index fell 1 per cent from the previous auction two weeks ago and the average price to US$3204 ($NZ4468) per tonne. Some 35,669 tonnes of product was sold, down from 37,990 tonnes at the previous auction.
Whole milk powder slipped 0.5 per cent to $US3014 a tonne.
"Falling New Zealand milk production should be supporting whole milk powder prices; however Fonterra also lifted its WMP offer volumes from forecasts last week," AgriHQ dairy analyst Susan Kilsby said.
"Buyers seem to be confident that they will be able to source WMP when they need it so are not competing too hard for product."
Rennet casein dropped 8.6 per cent to $US5612 a tonne, while skim milk powder slumped 5.6 per cent to $US1797 a tonne.
The slide in skim milk powder prices was unexpected.
"Skim milk powder prices have been driven by factors surrounding the European-government-run intervention scheme," Ms Kilsby said.
"There is speculation that SMP may not be bought in at a fixed price under this scheme next year, which would effectively remove the price support that Europe has for SMP."
Butter declined 2.5 per cent to $US5736 a tonne, while cheddar fell 0.1 per cent to $US4107 a tonne.
Bucking the trend, anhydrous milk fat rose 5.2 per cent to $US6841 a tonne.
"Anhydrous milk fat has been undervalued on a milkfat-content basis compared to butter for a number of months now, so a lift in AMF prices and a fall in butter prices goes some way to correcting this gap," Ms Kilsby said.
Butter milk powder was not offered and no prices were available for lactose.
There were 137 winning bidders out of 165 participating at the 16-round auction. The number of qualified bidders rose to 544, up from 541 at the previous auction.