Dairy price hit worse than expected

Author
Newstalk ZB staff,
Publish Date
Wed, 18 Nov 2015, 12:35PM
(Getty Images)
(Getty Images)

Dairy price hit worse than expected

Author
Newstalk ZB staff,
Publish Date
Wed, 18 Nov 2015, 12:35PM

The dairy industry's taken a worse than expected hit.

World dairy prices have fallen an average of 7.9 percent, while whole milk powder price fell 11 percent at the latest Global Dairy Auction overnight.

Andrew Kelleher of JMIS confirmed a weak auction was expected, but it's come out even weaker than anticipated:

He reported following the last auction two weeks ago future prices fell sharply.

"People were quite worried about the weakness in the near contracts. There were very few bids and that weakness has followed through to this auction."

The New Zealand dollar dropped slightly overnight following the drop.

Kelleher said it will only partially shelter exporters.

"The New Zealand dollar's a little bit weaker overnight after that auction and of course that does shield exporters a little bit from falling commodity prices as long as Fonterra hasn't got a whole lot of hedging in place and we don't know that."