Fonterra introduces the Fixed Milk Price [News Oceania n°1/2019]

Period: December 10, 2018 – January 4, 2019

Australian dairy market activity is very thin this period due to various holidays. Recent rain in parts of Australia has increased hope for less struggle to produce milk. However, some areas of Australia necessitate to import hay. Transportation costs resulting from drought have led to government subsidies for hauling hay and water infrastructure in New South Wales.

New Zealand
+4.4% milk production
Jun-Nov 2018 y-o-y

New Zealand milk production in October 2018 was +1% than in October 2017. The increase of the first half of the 2018-19 season was +4.4% compared to June-November 2017.

For 2019, Fonterra will propose its members the opportunity to supply milk, from March to December, at a fixed monthly price (Fixed Milk Price), published Friday of the week with the second GDT event each month. Milk Producers will have until Monday to decide whether to accept the fixed price. They may commit up to 50% of their production, and the cooperative plans to offer the fixed price for 5% of New Zealand’s milk supply. Pricing will be referenced back to a New Zealand futures market price.

A new financial tool for Fonterra farmers

According to Fonterra, this new financial tool can help farmers with budgeting, planning, and managing on-farm profitability.

Prices for dairy commodities in Oceania firmed.

The production of Butter, SMP and WMP is active, in particular the Cheddar Cheese production is in high gear to strive to meet domestic demand. Most Q1 2019 production of Cheddar, SMP and WMP has already been committed. - New Zealand milk production – New Zealand milk production

- 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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The 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.

Posted in News Oceania EN, Oceania_