Rt Hon Winston Peters

New Zealand First Leader

Member of Parliament for Northland

2 NOVEMBER 2016

Dairy price rise real or ‘another dead cat bounce’?

New Zealand First says erratic swings on the Global Dairy Trade Platform raises serious questions over whether it is helping the New Zealand dairy industry.

“At least today’s 19.8% surge in Whole Milk Powder (WMP) has belatedly broken the US$3,000 per metric ton barrier,” says New Zealand First Leader and Northland MP Rt Hon Winston Peters.

“There is a world of pain out there and it’s cold comfort for farmers to see prices apparently rise when their production is way down, especially as it is in much of the North Island.

“And with WMP at its highest price since 5 August 2014, farmers well know they’ve been here before. In late February and early March 2015, prices spiked to US$3,272 per metric tonne before they disastrously crashed.

“So, is this price rise real or is it another ‘dead cat bounce?’ The so-called experts hailed early 2015 as the start of price recovery just as they’re now hailing this 19.8 percent rise but they were seriously wrong back then.

“Big questions also remain over Fonterra’s use of the Global Dairy Trade platform. Northland farmers struggle to see how auctioning product in this way improves their bottom line when 18 of the world’s largest dairy companies do not use it.

“It is also easy to spike a limited market like this if you throttle supply while publicising tough growing conditions. The test comes not in the next auction but the ones following that,” says Mr Peters.

ENDS

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