Global dairy prices will continue to fall until either the supply of product declines or buyers have confidence the world economic situation will improve, Fonterra commercial director of GlobalTrade Guy Roper says.
The average price paid for whole-milk powder was $US2223 per tonne during the company's latest global Dairy-Trade internet-based auction.
This figure is 14 per cent lower than for the previous trading event in November.
‘‘The current economic crisis has resulted in a significant drop in the demand for dairy commodities and a continued decline in prices was expected,'' Mr Roper said.
‘‘There will continue to be a downward pressure on prices, until either the supply of product declines or buyers have confidence that the global economic situation will improve,'' he said.
Since July, whole-milk powder prices had declined by 49 per cent.
During the same period, the United States Department of Agriculture had reported a 45 per cent decline in European Union skim-milk powder prices, he said.
The prices of other agricultural commodities had fallen by similar amounts.
Since their mid-year peaks, the prices of barley, maize, soybean meal and wheat had fallen between 40 per cent and 55 per cent, he said.