Tuesday, 10 March 2015 10:11

Small price rise good enough

Written by 
Andrew Hoggard Andrew Hoggard

Despite a smaller rise in the global dairy price index last week, farmers will be happy, says Federated Farmers Dairy chairman Andrew Hoggard. He says farmers were hoping for another big rise, similar to the previous two auctions but this did not eventuate.

“At least the price index is rising,” he told Dairy News.

The most recent auction saw prices rise while volumes dropped; Fonterra’s GDT price index climbed 1.1%, with an average selling price of US$3374/tonne.

A total of 22,094 tonnes was sold at the latest auction, falling 3.8% from the previous one.

However, the price rise for Fonterra’s flagship product, whole milk powder (WMP), was down 1% to US$3241/tonne.

Fonterra last month held the 2014-15 milk payout at $4.70/kgMS.  And the co-op says WMP prices must reach US$3500/t by April to sustain the $4.70/kgMS payout forecast.

After tumbling late last year, milk powder prices are now rising; GDT prices for whole milk powder have risen 45% and skim milk powder prices 13%. 

Fonterra chairman John Wilson says the increase was not sufficient to raise the forecast milk price now.

On the coming season, Wilson says it’s difficult to predict prices so far ahead. “There is so much volatility, we are finding to difficult to forecast on a week-to-week basis, let alone 18 months.”

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