Whole milk powder prices fell 1.2% at Fonterra's monthly global dairy trade internet auction held yesterday.
The average price for whole milk powder, which made up the bulk of the offering, was $NZ5538 ($US3932) a tonne, $52 ($37) lower than April's auction, while skim milk powder prices slipped $84 ($60) a tonne to $5087 ($3612), 1.4% lower than in April.
The price of anhydrous milk fat rose $271 ($193) a tonne to $7070 ($5020).
Fonterra global dairy trade manager Paul Grave said the price movement was within the expected range and showed the market was consolidating the gains made in recent months.
Prices were expected to continue to show some volatility, but there were signs buyers were concerned about supply constraints from the drought in the north of the North Island, lower Australian production and a slow start to the European dairy season.
The sale also marked the introduction of a trade-weighted index, known as gDT-TWI, which showed the percentage monthly change in the average price of a basket of 30 products traded in global dairy trade which were weighted by international dairy product flows.
