Dairy price rebalancing a slow process

Photo / Sarah Ivey

International dairy prices are now well below levels that will be sustainable in the medium term and all signs suggest a prolonged period of low prices will be required in order to soak up the current global market surplus, says Rabobank in its quarterly report.

The report, published this week, indicates that the orderly decline in global dairy prices that became evident in the second quarter this year set in well and truly during the third quarter.

Rabobank's Hayley Moynihan says that milk production has continued to expand strongly in global export regions.

Meanwhile, China has pulled back from buying on the international market as it concentrates on digesting stock accumulated this year.

"However, while a bottom appears to have been reached for New Zealand and Australian export prices, market rebalancing will be a slow process and price recovery looks some way off," she says.

BOOST IN SUPPORT

Fonterra has signalled an important step-up in its relationship with farmers, rolling out Farm Source to provide more support for farmers and bolster the co-operative's very close connection with rural communities.

Farm Source combines service, support, rewards, digital technology and financial options for farmers together with local Farm Source hubs to support the major dairying regions throughout the country.

Fonterra chairman John Wilson says Farm Source's seed was discussions with farmers and the "together as one" principle behind co-operatives.

"We have been talking to our farmers a lot about what we can do to further support them and their businesses.

"We challenged ourselves to come up with ways we could get in behind them as only a co-operative of our strength can do.

"Co-ops have always been about unity and collective strength and we have a lot of both.

"This is about putting it to work for our farmers so we all benefit."

QUEST FOR THE BEST

The quest to find the top Maori sheep and beef farm for the next Ahuwhenua Trophy BNZ Maori Excellence in Farming Award is now on.

The chairman of the Ahuwhenua trophy management committee, Kingi Smiler is urging individuals, trusts and incorporations to enter the competition. He says there are huge benefits in just entering.

• Entry forms and details at ahuwhenuatrophy.maori.nz