The disparity between prices of cheese and casein, and milk
powder has eased during the third quarter of 2013-14,
The dairy giant has had issues with capacity constraints,
running out of milk powder-processing capacity following
massive growth in dairy demand, while cheese and casein
prices lagged well behind milk powder prices.
In March, it announced it was bringing forward planned
capital investments to provide extra capacity.
In a global update this week, Fonterra said the relative
increase in the price of reference commodity products shipped
in the third quarter continued to be higher than the increase
in non-reference products, but the effect was less pronounced
than in the first and second quarters.
Reference commodity products were those used in calculating
the farmgate milk price - whole milk, skim milk and butter
milk powders, butter and anhydrous milk fat.
Prices for reference products were up 44% for the third
quarter, compared with the third quarter in 2013, while
non-reference products were up 22%.
Milk collection across New Zealand for the 11 months to April
30 reached 1524 million kg ms, 8% higher than in the previous
corresponding period. Rain brought relief from the dry
conditions that had affected volumes in the North Island.
North Island collection in April was 51% ahead of April last
season, which was affected by widespread drought.
However, strong winds and heavy rain damaged properties in
parts of the country.
The South Island continued to experience favourable
conditions, with collection 16% ahead of the same period last
Milk collection across Australia for the 10 months to April
30 was 3% behind the same period last season, due to
below-average spring conditions.
Recent rain across most regions and particularly favourable
pasture growth conditions in Tasmania resulted in April milk
collection that was 7% ahead of the corresponding period last