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Powder prices jump 16.9% in Fonterra's September auction, backing hopes for NZ$7/kg payout

Powder prices jump 16.9% in Fonterra's September auction, backing hopes for NZ$7/kg payout
<p> Fonterra&#39;s current forecast range for the ongoing 2010/11 season&#39;s payout is NZ$6.90-NZ$7.10</p>

Fonterra has announced that prices at its monthly internet auction of milk powder overnight bounced 16.9% to a three month high.

This reinforces Fonterra's August 20 decision to hold its current forecast for a payout for the ongoing 2010/11 season of between NZ$6.90 to NZ$7.10/kg of milk solids, despite a 28% fall in the New Zealand dollar price of dairy products in the previous three months.

Fonterra said then it was seeing fresh signs of firm demand and bad weather in Russia and China was helping restrict supply from competitors.

Russia's imposition of a wheat export ban in August also increased grain prices, which makes it more expensive for grain-fed producers of milk for export in the Northern Hemisphere.

The news will bolster sentiment in a rural economy struggling with weak farm spending amid a general push to repay debt.

It's also a boost in the wake of the receivership of South Canterbury Finance.

Paul Grave, globalDairyTrade Manager, said the result appeared to indicate a firmer tone has returned to the market over the last month.

The next globalDairyTrade trading event will be held in two weeks’ time on 15 September as globalDairyTrade moves to two auctions per month.

Dairy prices

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3 Comments

Great news for dairy producers who are not up to their neck in debt...for those who are, be happy that the bank will be happy and get back to work. Sorry to hear of your loss. The ponzi scheme was a good little capital gain earner while it lasted. We too hope the weather up in the top half continues to destroy crops because without that, the prices might well head south again.

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Good to hear some positive news at last. Long may it last. I wish the good clean practise farmers that look after the land and their animals well  a good season. Spring has sprung so lets all enjoy a good spring and summer. Cheers.

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Good news indeed! Also add sheepmeats at historic highs, beef approching highs  on the back of huge shortages, grain prices riseing by the day even my wool cheque is up by 30% from this time last year! Dont worry NZ the calvalries on the way!

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