The drop in the Global Dairy Trade New Zealand auction this week was probably unexpected, however, so too was the volume of product traded.

The surge in volume of product traded seems to be an outlier and could have impacted on the lower price. Lately, it seems that Chinese powder buyers in particular have made a decision to step back from the Kiwi-controlled auction. Whole milk powder is the core ingredient sold.

Traditionally, China has been a big purchaser but it seems they are now looking at alternative ways to purchase product. Is it a case that the auction is no longer the best barometer of global powder prices? Irish co-ops seem to have built in potential milk price drops already in the summer milk price falls. Milk suppliers will be hoping to hold current prices at the very least for August.