Dairy prices higher in NZ Fonterra's auction

WELLINGTON Tue Nov 20, 2012 1:15pm EST

WELLINGTON Nov 21 (Reuters) - International milk prices pushed higher, led by cheddar, New Zealand's Fonterra Cooperative Group, the world's biggest dairy exporter, said on Wednesday.

Fonterra's Global Dairy Trade-Trade Weighted Index, which covers a range of 30 products and contract periods on offer, rose 0.7 percent, with an average selling price of $3,348 per tonne. It followed a 1.1 percent rise at the previous auction.

Prices had risen in six of the previous seven auctions.

Dairy prices, which peaked in October 2007, have gained more than 23 percent since the middle of the year, in part because of the drought in the United States, as supply and demand have become better aligned.

At the latest auction, there were price gains for cheddar and anhydrous milk fat, while prices for whole milk powder, skim milk powder and milk protein concentrate fell.

Full details of the auction are at: www.globaldairytrade.info

Fonterra holds two auctions a month, with the next one due on Dec 5.

The co-operative set its forecast payout for the current at NZ$5.65-NZ$5.75 largely because of a strong local currency. See

Fonterra is owned by about 10,500 farmers and controls nearly a quarter of the world's dairy exports, generating more than 7 percent of New Zealand's gross domestic product.

Dairy produce makes up more than a quarter of New Zealand's NZ$48 billion annual export earnings, and the currency is often sensitive to movements in prices. (Reporting by Gyles Beckford)