Dairy commodity prices slumped again at Fonterra’s latest GlobalDairyTrade auction, dropping by 6.4% compared to the previous sale.

The weighted average price of all commodities settled at US $2,618 (£1,640) – the lowest level since August 2009. It was the third consecutive auction to record a drop in prices, with nine of the past 11 sales showing a downward trend. Values are now more than 40% below the same time last year, dogged by economic uncertainty in Europe, strong global milk production and weak Chinese demand.

Anhydrous milk fat led the latest slide, dropping by 11.9%, with whole milk powder down by 8.9%, skimmed milk powder by 5.4% and cheddar down by 0.2%. In total, 39,795t of product was sold, compared to 33,125t a fortnight ago and 13,308t at the same time last year.

Meanwhile, UK milk production continues to drop back from its peak, with deliveries in the fortnight to 5 May averaging 39.8m litres a day. That was 900,000 litres a day lower than the same time last year, but 100,000 litres ahead of the three-year average, said a report by DairyCo.

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