Prices on the Global Dairy Auction have crashed again, taking world trade back to levels last seen in August 2009.
Average prices fell 7.3% to US$2,599/t on Wednesday (1 October) after staying level at the previous fortnightly auction.
The online auction, a key indicator for world markets, has now dropped 48% from its all-time high in February.
Prices stayed level a fortnight ago but hopes of stability were quashed as every product suffered losses.
Butter milk powder dropped 11.3%, whole milk powder was down 10%, butter fell 6.6% and skim milk powder was 2.7% lower.
Cheddar faced a smaller drop of just 1.2%.
Rabobank’s latest quarterly report, released on the same day as the auction, said dairy markets were unlikely to recover over the next 12 months.
It said the high milk supply would ease off as milk prices continued to fall but any upturn would be delayed by dropping feed costs, the removal of EU quotas next spring and a lag before any rises reach the farmgate .
“All signs suggest that a prolonged period of lower prices will be required in order to clear the international market,” Rabobank analyst Tim Hunt said.