Dairy prices increased by 2.4% at Fonterra’s latest auction, overcoming fears that a food safety scare involving a grass growth promoter would damage trade results.
This was the 10th price increase in the past 12 auctions, putting values 37% higher than the low reached in May last year. Overall, 38,323t of dairy products were sold, at an average price of $3,598/t which was $68/t down on a year ago.
However, the scare over dicyandiamide use on grass still had the potential to knock international trade, said quota broker Ian Potter. “The Chinese, who are still nervous of dairy products because of the melamine scandal a few years ago, want answers to lots of questions and with headlines like ‘New Zealand milk is poisonous’ this story is likely to run.”
Closer to home, domestic wholesale values generally improved during January, with skimmed milk powder and butter up by £50/t, according to a report by DairyCo. The Actual Milk Price Equivalent, made up of a basket of dairy product values, increased by 0.4p/litre, to 31.2p/litre – 1.2p higher than the same time last year.