Fonterra optimistic over milk price rises

By Neil Merrett

- Last updated on GMT

Related tags: Milk, European milk board

Fonterra says it has recorded a second consecutive monthly rise in the prices being paid to its member farmers for their milk, reflecting possible stabilisation in the supply chain.

The New Zealand-based cooperative said that at the conclusion of its April trading event for the global​DairyTrade sales platform, the price per tonne for Whole Milk Powder (WMP) was up 3.5 per cent on the previous month.

Kelvin Wickham, Fonterra’s managing director of global trade, said the increase was a sign of more balanced supply and demand for milk at a time when farmers around the globe call for more price support to meet costs.

“It’s encouraging to see some stability in the market and while some economic risks remain, we are positive about the medium-term outlook,”​ he stated.

According to the group’s global​DairyTrade service, prices ranged between US$2,110(€1,576) to US$2,400 (€1,793) per tonne FAS.

Other markets

The trading event reflects similar rises in markets like the UK. Last month, the United Dairy Farmers (UDF) auction resulted in an average milk price in pence per litre (PPL) of 18.83ppl, an increase of 5.7 per cent over February.

According to the DairyCo Milk Market Update, an increase in average global prices for WMP of 13.5 per cent to $2,100/tonne was thought to have influenced the auction.

“Reasons for the increase in the price of WMP include the amount of uncommitted product available from New Zealand falling between February and March; there is also a renewed interest from buyers,”​ stated the update.

The UDF March auction price was still said to be down by 3.78 ppl compared to the average price a year ago, reflecting a decline of 16.7 per cent.

Some farmer groups such as the European Milk Board (EMB) continue to call for greater support from retailers and other industry stakeholders to help ensure prices that can ensure its members can meet milk production costs.

European Milk Board (EMB) continue to call for greater support from retailers and other industry stakeholders to help ensure prices that can ensure its members can meet milk production costs.

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