Are Global Dairy Trade Blues Hitting the Cities?

New Zealand First says Fonterra’s forecast payout is under pressure with falls in the first two dairy auctions of 2016 - well over half-way through the 2015/16 season.

“Fonterra’s benchmark payout forecast is under huge pressure with Whole Milk Powder down 4.9% in the last two auctions and 16.8% since November 2015,” says New Zealand First Leader and Member of Parliament for Northland Rt Hon Winston Peters.

“The average in-season Whole Milk Powder price of US$2,227 a ton is a long way short of the US$3000 mark that Fonterra says it needs to pay out $4.60 per Kilogram of Milksolids (kg/MS).

“Our number two milk processor, Open Country Dairy, has already slashed its milk payout range to $4-$4.30 kg/MS.

“Time is fast running out for the rebound the experts keep pushing out to ‘next Christmas’. That’s of course if they can produce at all, given drought-like conditions in parts of the South Island the government is only now reacting to.

“Our farmers need real markets now and not promises like the TPPA. While the government has welcomed the lifting of sanctions against Iran, it has de facto sanctions on the world’s second largest dairy import market - Russia.

“The effect of low dairy prices may be starting to filter through to the cities with December’s Christmas retail spending falling 0.2% when adjusted for seasonal effects.

“So much for National’s claim of economic growth because where is the per capita GDP increase and where is the retail spend increase in real terms,” says Mr Peters.

ENDS

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