Northland MP Winston Peters has responded to the "crashing" of the benchmark price for whole milk powder by calling on Fonterra to temporarily suspend its participation in the GlobalDairyTrade (GDT) process.
"It is high time Fonterra's board comes down from Mt Olympus to act in the best interests of its farmer-owners and not some economic theory," he said, noting that Waikato Federated Farmers president Chris Lewis was making the same call.
"Auctions are great in bull markets like the Auckland property bubble, but it is a terrible way to sell when markets turn ugly, as the record low price for whole milk powder indicates," he said. "This is a call to suspend Fonterra's participation in GDT, as opposed to leaving it completely, something the big European dairy co-op Molkerei Ammerland did in April, saying GDT did not align with its newly defined sales and marketing strategy."
Fonterra had ceased selling milk protein concentrate through GDT in March 2014, so the co-op had "form" for doing what New Zealand First was suggesting, albeit with a small product line.
"Any temporary suspension by Fonterra is not an end to GDT, but says enough is enough," Mr Peters added. "Since Fonterra accounts for some 30 per cent of global dairy exports, this would act as an immediate price stabiliser, especially as Fonterra starts to clear stored inventory."
