Time for domestic price of milk to be set by independent body

Fonterra's publication of its Milk Price Manual explaining how it sets the price of milk for the domestic market is a welcome move, Green Party Food spokesperson Sue Kedgley said today.

This document explains how Fonterra quantifies the price they pay to their shareholders for the milk they deliver.

"The Milk Price Manual confirms that Fonterra largely bases the domestic price of milk on the global price Fonterra would get by selling milk solids overseas," said Ms Kedgley.

"We have heard evidence during the Select Committee Milk Price inquiry that the global milk price is hugely inflated by speculators trading in milk.

"This means that New Zealanders ability to pay for a staple food product is being adversely affected by global commodity speculators.

"The Green Party considers that domestic milk prices should not be determined by an inflated global milk price," said Ms Kedgley.

"We consider a good first step in tackling this issue would be for the domestic price of milk to be set by an independent body or Commissioner, not Fonterra."