The result of the Global Dairy Trade (GDT) that took place on Tuesday 5 July was back on average by 4.1%.
Butter took a heavy cut. It is the sixth price drop in the last seven auction days of the New Zealand internet auction. The last auction on 21 June was down 1.3%.
The value of butter fell nearly 10% to $5,648/t. This is the lowest level since January. In May, there was also a considerable correction, but then the butter price picked up again.
Milk powder prices are also falling. Skimmed milk powder is down about 5% and can hold up just above the $4,000/t mark. Whole milk powder dropped by 3.3%.
The Ornua purchase price index (PPI) for June is 179.4 (56.0c/l, VAT-inclusive based on Ornua’s product purchase mix and assumed member processing costs of 8.3c/l and excluding member margin). The June result is up from May, which was 178.5.
The energy cost element of processing is variable and changes each month, depending on energy costs.
Ornua says the increase is a result of continued stronger returns across the product range.
In addition, the Ornua value payment payable to members in the month is €10.4m, which equated to 3.6% of gross purchases in the month (3.7% year to date).
When we combine the value payment and the index equivalent price, it comes to 55c/litre ex-VAT for June.
Co-ops will set June milk prices in the coming 10 days. The May prices published this week show the average ex-VAT at 49.6c/litre.
Last week, we published an incorrect cheddar price. It has been updated this week.