GlobalDairyTrade increase welcome, but volatility not

Federated Farmers has welcomed the 25.8 percent uplift in whole milk powder prices (WMP) from the latest GlobalDairyTrade (GDT) event, but remains concerned at fluctuations in WMP prices.

“While the 25 percent uplift in WMP to US$2,301 per tonne is great news for dairy farmers, the increasing volatility of the last three trading events isn’t,” says Lachlan McKenzie, Federated Farmers Dairy chairperson.

“This price volatility means we must ask if GDT is reflecting international events or exacerbating volatility.

“The Federation still does not understand the long term strategy underpinning GDT. The Federation believes Fonterra is missing out on realising substantial value, which comes by being a trusted food component supplier.

“Long term mutually beneficial relationships with manufacturers underpin long term value.

“The aim should be to build up Fonterra’s component brands to derive maximum value for New Zealand’s dairy farmers.

“This picture is becoming blurred as Fonterra adds WMP into the supply chain from its global operations,” Mr McKenzie concluded.