Buyers reluctant to shell out as dairy product prices soar, says Dutch Dairy Board
Following market nervousness as prices accelerated ahead of fundamental factors — especially for milk powder — the market turned from the last week of February, and is now trending lower in search for a new, better balanced price level, said the Dutch Dairy Board in its monthly report to the LTO farmers’ organisation.
Butter prices were still steady, but international butter buyers were also becoming more reluctant to buy at high prices.
Despite the warnings, whole-milk powder prices surged to a record level in last week’s auction by Fonterra of New Zealand, which has about 40% of the global trade in dairy products.
The price rise was attributed to sustained demand from China, and concerns that rising farming costs may curb milk supply.
Irish co-ops Glanbia and Kerry were accused last week by farmers of undershooting milk price targets. Kevin Kiersey of IFA said a February milk price of 3c/l increase was fully justified, and expressed disappointment with to increases of 1.44c/l plus VAT in January and February at Glanbia, and 2.85c/l plus VAT in February at Kerry.
* The Dutch Dairy Board’s monthly report ranked January milk prices paid by 17 major EU processors, placing Glanbia third best. Remarkably, New Zealand farmers were paid better than suppliers to 12 of the EU processors (including many in Ireland).
Due to Fonterra’s success in export markets, the New Zealand government has stepped in to declare a retail milk price freeze in their home market, where consumers have to pay nearly twice the Australian price for milk.
