The Global Dairy Trade (GDT), an indicator of market sentiment, has seen its first drop for three months.
The fortnightly auction, owned and run by New Zealand processor Fonterra, fell by 3% at Tuesdays auction (4 October).
There were substantial drops in skim milk powder (SMP), down 3.9%, whole milk powder (WMP), down 3.8% and lactose, which dropped by 9.7%.
Buttermilk powder was the only commodity to perform well, up 9.3%, however this is one of the smallest markets in the auction.
It’s far too early to look at these results and say dairy markets are going to go back down. We need to see the next few results and see if any trends develop Chris Gooderham, AHDB
“The next few auctions will be crucial,” said Chris Gooderham a senior analyst at the AHDB.
“It’s far too early to look at these results and say dairy markets are going to go back down. We need to see the next few results and see if any trends develop.
“This result is no great surprise and may just be the markets readjusting to the strong rises we’ve witnessed in the past four auctions.”
Mr Gooderham added: “Powder markets have seen the largest drops but if you look at the fat markets not a lot has changed at all.”
GDT events measure bids from dairy commodities from participants spanning 80 countries around the world, including the EU, New Zealand, Australia, India and the US.