Average prices achieved at the biweekly Fonterra internet sale continue to increase. At the latest sale on 3 March, prices were on average 1,1% higher than at the previous sale on 17 February 2015. This followed the 10% increase in the previous sale. Cheddar prices increased by 10,8%, buttermilk powder by 6,8% and skimmed milk powder by 5,9%. The price of full-cream milk powder decreased by 1,0%.
The Global Dairy Trade price index is currently at 965, the highest level in eight months and 29% higher than at the beginning of December 2014. A major driver of the higher prices is the announcement by Fonterra that they will reduce the quantities of products sold on the Global Dairy Trade market. Drought in some areas of New Zealand may also influence expected production. According to MPO economist Dr Koos Coetzee, the higher prices are an indicator that the decrease in the producer price in New Zealand is influencing farmers’ production decisions. Higher international prices have already resulted in an increase in import parity to levels above the SA average producer price.
Published on Tuesday, 10th March 2015 - 13:14
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