FONTERRA, the New Zealand co-operative and world's biggest dairy exporter, has raised its milk price forecast for the coming year by the equivalent of 1.2p to 14.6p per litre (ppl). This year's final price has been set at a miserable 13.4ppl compared with the 29ppl the co-op paid its members two years ago.
Chairman John Wilson explained said: "We are expecting global dairy pricing to gradually improve over the season as farmers globally reduce production in response to ongoing low milk prices, however we continue to urge caution with on-farm budgets."
Chief executive Theo Spierings said that the long term fundamentals for global dairy remain positive with demand expected to increase by 2 to 3 per cent a year due to the growing world population, increasing middle classes in Asia, urbanisation, and favourable demographics.
He went on: "In addition to global supply growth, we are seeing imports into major dairy markets improving compared to a year ago. China's dairy consumption growth remains positive and its demand for imports has been steady over recent Global Dairy Trade (GDT) events.
"We expect these drivers to result in the globally traded market rebalancing."
GDT auctions, or "Events" as they are now called, are owned by Fonterra and regarded as the world benchmark for internationally traded milk product prices. At the most recent event on May 17th prices rose by 2.6 per cent, the third increase in four sales.
Market round-up
United Auctions sold 789 store heifers at Stirling on Wednesday to a top of 279.8p per kg and an average of 215.3p (-1.9p on the week), while 424 store, beef-bred bullocks peaked at 281.6p and levelled at 226.9p (-1.2p). One-hundred-and-seven store, B&W bullocks sold to 155p and averaged 142.8p (-0.4), while 27 store bulls peaked at 242.4p and levelled at 190.8p (no comparison).
In the rough ring 172 beef cows averaged 130p and 27 dairy cows levelled at 106.6p.
C&D Auction Marts Ltd sold 21 prime heifers in Dumfries on Wednesday to a top of 209.5p and an average of 180p.
There were 54 OTM cattle presented in the rough ring when beef cows averaged 123.4p and dairy cows levelled at 91.4p.
The firm also sold 169 prime hoggs to a top of £72.50 per head and 163p per kg to average 144p (-2.2p), while 113 prime lambs peaked at £96 and 212p to level at 201.5p (+8p).
The 192 cast sheep forward saw heavy ewes sell to £94.50 for a Suffolk and average £67.20 (+£2.18), while light ewes peaked at £64.50 for Blackfaces and levelled at £54.31 (+44p).
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