Experts Wrong Again On Flood-Led Global Milk Price Spike

26 April 2017

With the NZX Dairy Futures prediction for Whole Milk Powder reportedly out by up to 41%, NZ First questions what the point of GlobalDairyTrade is anymore.

“After Fonterra turned Eeyore over the impact of the floods on milk production, the so-called experts were beating their chest about a big, up to 6% lift in Whole Milk Powder (WMP) prices, but were wrong yet again,” says New Zealand First Leader and Northland MP Rt Hon Winston Peters.

“The TAB would be better and while this morning’s 3.5% Whole Milk Powder (WMP) uplift is welcome, we’re still to see prices back at where they were on 21 February.  In fact, this latest auction result sees WMP trading US$264 a metric ton under the 21 February price and US$668 under the 6 December 2016 season peak. 

“That’s the problem with GlobalDairyTrade.  It has become a huge fortnightly distraction where farmer morale ebbs and flows like water. 

“Since Fonterra only sells a fraction of product through GDT, NZ First asks if GDT is a dangerously redundant tail wagging the industry’s dog.  Straight WMP averages on GDT tell us this season is only marginally ahead of 2014/15’s $4.40 payout. 

“With speculation this season’s payout is holding or expected to exceed $6 before dividends, GDT is no longer even a reliable ‘price discovery’ guide.  

“And the flooded farmers of Bay and Plenty and Waikato, whose winter feed has been destroyed will basically say ‘whatever.’ It is all academic if you cannot milk. 

“And just where is Minister Guy or National’s local MP’s offering practical support? 

“Waikato Regional Councillor Stu Husband has been on farms mucking-in but National’s a no-show in Waikato and with winter upon us, this so-called National government needs to do a lot better than that,” says Mr Peters.