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BusinessDesk: Fonterra dairy product prices resume slide in latest auction, falling 1.2%

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BusinessDesk: Fonterra dairy product prices resume slide in latest auction, falling 1.2%

2nd Nov 11, 8:11am by BusinessDesk

Average prices of dairy products resumed their slide in Fonterra Cooperative Group’s latest auction, the ninth decline in the past 10 sales and the first since the company cut its forecast 2012 payout.

The GDT-TWI Price Index fell 1.2%, according to the latest results posted on the globalDairyTrade auction website.

The average winning price declined to US$3,511 a metric tonne. Whole milk powder, the biggest product by volume, fell 0.8%.

Fonterra chairman Henry Van der Heyden said on Oct. 25 that global dairy prices hadn’t recovered as expected as rival producers ramped up production and the stronger kiwi dollar was exacerbating the impact.

The payout to farmers for 2012 would be lower than 2011’s record payout.

Whole milk powder fell to US$3,487 a tonne in the latest sale while skim milk powder gained 0.2% to US$3,292. Anhydrous milk fat fell 9.3% to US$3,309 a tonne and milk protein concentrate fell 10.7% to US$5,608 a tonne.

Rennet casein jumped 35 percent to US$9,182 a tonne. Butter milk powder fell 2.2% to US$2,934 a tonne and cheddar fell 3.2% to US$3,406 a tonne.

There were 122 winning bidders from 149 participants over 16 rounds. The platform has 463 qualified bidders, up from 443 at the last auction.

(BusinessDesk)

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Source: GlobalDairyTrade and USDA

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8 Comments

by Andrewj | 2nd Nov 11, 8:24am 1320175440

here's the problem,

>>>>>

China milk powder imports slump to three-year low

China's imports of whole milk powder have slumped to their lowest in nearly three years, raising concerns over one of the key props to world dairy market, days after export giant Fonterra cut its price forecasts.

China's whole milk powder imports fell below 8,000 tonnes in September, a fifth successive month-on-month decline, and the lowest figure since December 2008, Global Trade Information Services data showed.

The country's imports of the product, used largely in yogurt, ice cream, bakeries and chocolates, still remain higher so far in 2011 than a year ago, thanks largely to a jump in imports to 55,000 tonnes in April.

However, the rate of increase, of 13%, is far lower than the pace that some observers have been factoring in, with the US Department of Agriculture forecasting a 34% increase for the full 2011, to 430,000 tonnes.

http://www.agrimoney.com/news/china-milk-powder-imports-slump-to-three-…

by skudiv | 2nd Nov 11, 8:41am 1320176501

Every one is broke, could also sum up the problem.

by Bernard Hickey | 4th Nov 11, 11:50am 1320360620

FYI from a reader via email:

Hi Bernard, I wonder please if your able too give us your view on the need for any Government today to be still in ownership of LANDCORP FARMS,like about 175,000.ha of land,value approx =$1.05b, livestock value = $297m, and a total assets base of $1.66b. $42m profit a $27.5m divident is an awful retun on capital so does this make great investment no. Landcorp are now corporate farmers and no longer allow the younger farmer too go forward and buy a farm as they will always out bid these young hopefuls with taxpayer funds against those same taxpayers, and its bit like the point being made by Landcorp too the maybe Crafar Farm buyers the Chinamen that Landcorp will manage or sharemilk the Crafar farms for them, wouldnt it be better used capital for Schools Hospitals and the like. Sell it to cash rich Maori Iwi's whom can then load up the work force with there own, therefore reducing unemployment.

by Bernard Hickey | 4th Nov 11, 11:50am 1320360640

Hi.

I can see your point on landcorp.

My view is land prices need to be allowed to fall by withdrawing the debt stimulus.

I'm not a fan of selling landcorp.

cheers

Bernard

by Sheep Shagger | 4th Nov 11, 1:07pm 1320365229

Bernard, I have been at a meeting where Bill English has been asked about the govt continueing to retain landcorp. His reply was it was in the bigger scheme of things a landbank for treaty settlements.

As an aside, I note you are advertised as being a keynote speaker at a sheep breeding fielday in Winton soon. Whilst recogniseing you as adept at economic commentary I was unaware that your expertise extended to sheep genetics? Im sure the good sheep farmers of the south will be enthralled by your advice on the merits of useing a romney or a composite:) They will however be interested in why their land prices should fall.

by Belle | 4th Nov 11, 2:46pm 1320371181

Are you a fan of Landcorp still acquiring farms? They recently bought up land in the manawatu. When a block is used as a treaty settlement, they just buy another. One wonders about the realm they continue to build, managing land for corporates, buying here and there, its quite an empire they have built, yet their return is woeful even in good times. I know of a manager getting a 150k salary. If only it were pegged to production. How can land prices fall and normalise if gits like landcorp bosses get to play Donald Trump with our farms Bernard?

by Belle | 4th Nov 11, 2:50pm 1320371440

by Belle | 4th Nov 11, 1:47pm 1320367675

What is Aussie producing and exporting? I had a conversation with a guy who just came back from working in the oz dairy industry, they have industrialised like us.....