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Fonterra Auction Prices Should Be Impacting on EU Market

17 June 2013

IRELAND – Cooperatives should consolidate April hardship bonuses and add 2 cents a litre to base prices in light of Fonterra auction price adjustments, an Irish Dairy Spokesman has announced.

Strong market prices in New Zealand have had little impact on EU product prices which have continued at an average of 45 cents/litre.

This is according to Irish Farmer’s Association Dairy Committee Chairman, Kevin Kiersey who has said that movements from Kerry and Glanbia should be mirrored throughout the country.

“Last week, Kerry lifted their May milk price 2.86c/l to 36.26c/l + VAT. This week, Glanbia announced a price lift of around 1.9c/l to 35.3c/l + VAT, proving our argument that current market returns fully justify a major base price increase from May,” Mr Kiersey said.

“While the announcement by Fonterra of an increased milk price to NZ$7/kg MS will undoubtedly send a strong message to New Zealand farmers, a good early season which can reverse the current tight global supply situation will require some major improvement in pasture conditions by August or September,” he added.

Early June Fonterra pricing remains 53 per cent above this time last year. Mr Kiersey is adamant that these auction results should have more effect on European trading.

Instead, prices are stable. Average so far through June for Butter has been €3,970/ton for butter, €3,090/ton SMP and €3670/ton for WMP.

“Even the EU spot quotes for last week, which ought to have been more influenced by the speculation underpinning the Fonterra results, have remained relatively stable at high levels. Dutch quotes this week were €4020/t for butter, €3700/t for WMP and €3100 for SMP,” he concluded.

TheCattleSite News Desk

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