Milk powder price up 0.8% in Fonterra's March auction

The average whole milk powder price achieved in Fonterra's monthly online auction overnight was US$3,281 a tonne, up 0.8% or US$25 a tonne from the previous month. It is down 25% from the peak in July 2008 and up 79% from the low in July 2009. This is unlikely to change the outlook for the Fonterra's milk price forecast for the current season of NZ$5.70/kg milk solids or for the likely dividend of 20-30c/kg. Here is Fonterra's full statement below.

globalDairyTrade, Fonterra's internet-based sales platform, concluded its March trading event this morning (NZT) with the average price for Whole Milk Powder up 0.8%, or US$25 per tonne, from the February event. The trading manager, CRA International, advised Fonterra that the average price achieved across all contracts and contract periods for Whole Milk Powder (WMP) was US$3,281 per tonne FAS. Prices ranged from US$3,180 per tonne FAS to US$3,395 per tonne FAS. Paul Grave, globalDairyTrade Manager, said this was a pleasing result that reflected a relatively stable market over the last four weeks. "There is still an element of uncertainty as to how supply and demand factors will influence prices over the coming months," Mr Grave said. "Buyers are focused on ensuring their short to medium term supply requirements have been secured." For Anhydrous Milk Fat (AMF), the average price achieved across all contracts and contract periods was US$3,959 per tonne FAS. This was US$224 per tonne, or 5.4%, lower than the February event. The event included sales of Skim Milk Powder (SMP) for the first time. For SMP, the average price achieved across all contracts and contract periods was US$2,927 per tonne.