Whole milk powder plunged to the lowest price in at least seven years at an international auction, the latest indication yet of chronic oversupply in the global daily industry.
The average price in the auction fell 14 per cent, GlobalDairyTrade, the organizer, said Tuesday on its website.
Plentiful global milk supplies are keeping buyers on the sidelines, and slowing economic growth in China – the biggest importer – means prices could keep falling, said Eric Meyer, president of HighGround Dairy.
Farmers in the U.S., Europe, Australia and New Zealand expanded production after seeing record dairy prices last year. At the same time, China has slashed purchases and bolstered its production.
Combined with fair weather and cheap feed prices, there's now a global surplus, Mr. Meyer said. That's sent world dairy prices to their lowest since 2009.
Average prices for whole milk powder dropped to $1,590 (U.S.) a metric ton, according to GlobalDairyTrade, a low point in data tracking the market back to 2008.