The window of opportunity for changes to this season's
Fonterra milk price and dividend is closing, economists say.
Dairy prices posted a modest 1.2% fall in this week's
GlobalDairyTrade auction, although remained high.
Products in Fonterra's cheese and casein stream, as well as
butter and anhydrous milk fat, continued to lose some of the
gains made from mid to late 2013, ASB rural economist Nathan
He had previously said that a sustained rise in the cheese
and casein stream prices would open up the possibility of a
lift to Fonterra's milk price or dividend, but the latest
falls reduced that possibility, he said.
Demand for New Zealand milk powder remained very strong at
prices around $US5000 ($NZ6027) a metric tonne. Forward
contract prices indicated ongoing support for prices over
On the back of continued strong demand, ASB had ''pencilled
in'' a farmgate milk price of $7.80 for the 2015 season.
The main caveat to that was the assumption that Fonterra
''gives back next season much of what it is taking away this
season'', Mr Penny said.
Fonterra yesterday announced a $32 million expansion of its
slice-on-slice cheese capacity at its Eltham site in
Taranaki, in response to fast-growing demand throughout
Australasia, Asia and the Middle East.
Slice-on-slice cheese was used extensively in quick service