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Fonterra will increase GDT offerings

New Zealand dairy giant Fonterra says it will hold the farmer pay price for milk at $4.70 (NZ) per kilogram of milk solids for the remainder of the 2014-15 season. Some had expected the co-op to raise the prices a little in response to higher global commodity prices.  Whole milk powder has increased 45 percent and skim milk powder increased 13 percent since December but Chairman John Wilson said the increases were not sufficient to raise the forecast milk price.

The cooperative is holding on its projected dividend of 25 to 35 cents per share which helps offset the lower milk prices for farmer-members.

Fonterra also announced that, despite the continuing drought on New Zealand’s South Island, the co-op will increase its offerings at the coming Global Dairy Trade auctions. The rebound in GDT prices was spurred by Fonterra when they announced in January that the drought was forcing them to reduce their dairy product offerings on the auction.  HighGround Dairy speculates Fonterra overestimated the decline in milk production.  However, product offerings will still be below year-ago levels at next week’s auction.