GlobalDairyTrade up, up and away

Federated Farmers is delighted by today’s 24.2 percent increase in average whole milk powder prices (WMP) from the latest GlobalDairyTrade (GDT) event.

“It is a big relief for dairy farmers to see the price of WMP still tracking up on the back of last month’s 25.8 percent uplift,” says Lachlan McKenzie, Federated Farmers Dairy chairperson.

“The last two auctions reflect the buoyancy of WMP prices. Last month’s uplift in WMP to US$2,301 and today’s increase to US$2858 per tonne is a sure sign there is light at the end of the tunnel. This is also illustrated by the positive long term outlook, with the average price for March to May 2010 rising to US$2861 per tonne.

“Dairy farmers will breath a sigh of relief when this predicted payout reaches their pockets by the end of the season in August next year. With this future economic stimulus from the agricultural sector, the Government now needs to look closely at the quality of its expenditure to keep inflation and interest rates in check. Coming off a tough season, the last thing the dairy sector needs is for this gain to be neutralised by increasing off farm costs.

“If these prices are sustained, it is possible they will counter the effects of the high New Zealand dollar on this season’s average payout.

“While this is positive news, we certainly do not want the dollar to climb even further. The Government must look to align its policies with the Reserve Bank of New Zealand to keep inflation under control, which may help settle the New Zealand dollar’s volatility. In other words, this is no time for reckless spending.

“Dairy farmers are poised to lead the New Zealand economy out of recession but can’t do so if inflation and the dollar continue to soar,” Mr McKenzie concluded.