Fonterra increased its farmgate milk price [News Oceania n°11/2018]

Period: May 14 – 25, 2018

April 2018 milk production in Australia is +4.5% from April 2017. July 2017-April 2018 milk production is +3.5% over one year earlier.

A study on the performance of the Australian dairy industry, conducted by the ACCC (Australian Competition & Consumer Commission), revealed imbalances at each level of the dairy supply chain, in particular a strong bargaining power imbalance and information asymmetry in farmer-processor relationships. The ACCC therefore recommends that the Australian Government introduces a mandatory code of conduct to apply to dairy processors.

Fonterra’s forecast Farmgate Milk Price NZD/kgMS 6.75(2017-18) 7.00(2018-19)

In New Zealand the farming conditions improved and contributed to April 2018 milk production being +2.9% from April last year. June 2017-April 2018 milk production in New Zealand is -0.1% over one year earlier.

New Zealand’s Fonterra increased its farmgate milk price forecast for the 2017-18 season by 0.20 NZD to 6.75 NZD/kgMS. Converted into milk, the price is 29.67 €/100 kg of milk fat and 3.4% protein mass/mass (ref. Germany, current change of reference: 1 NZD = 0.5940 €).

Fonterra announced an opening forecast farmgate milk price for the coming 2018-19 season of 7.00 NZD/kgMS and expects a milk collection +1.5% than the current forecast for the season about to end.

Almost all current dairy processing is focused on making WMP, which is the most profitable product focus. WMP price is slightly increasing.

Butter availability in Oceania is getting tighter. Prices firmed and price trends are following butter strength in Western Europe.

SMP price has strengthened further, reaching the highest during 2018. There is little SMP being currently manufactured in Oceania and recent SMP buying interest has been robust.

Cheddar prices in Oceania are stronger and demand is quite strong.

CLAL.it - WMP Export from New Zealand and Australia

CLAL.it – Oceania WMP Export

– Assessments about market trend are expressed in US$;
– Dairy season: July, 1st – June, 30th (Australia), June, 1st – May, 31st (New Zealand);
– Source: USDA summarized by the CLAL Team

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CLAL Team
About

The CLAL.it team is composed of young people who with the help of Computer Science study the dairy market and develop tools to provide the Operators of the dairy sector with a comprehensive real-time view of the national and international market trends.

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