Heavyweight joins Fonterra auction

Fonterra sells whole and skim milk powder on the twice-monthly global auction, which has attracted bidders from more than 80 countries. Photo / Christine Cornege

Fonterra's twice-monthly online dairy auction has landed its third supplier in Australian heavyweight Murray Goulburn Co-operative.

Murray Goulburn will start offering lactose products in April on the GlobalDairyTrade sales platform, joining Fonterra and Dairy America.

GlobalDairyTrade general manager Paul Grave said Murray Goulburn's decision to offer lactose added a new product to the sales platform that was not offered by existing sellers.

"This demonstrates GDT's increasing role as a key platform for international trade in a broad range of dairy commodities," Grave said.

"We are delighted that a company of [Murray Goulburn's] standing and importance in world dairy markets has decided to participate in GDT and play a part in shaping its future."

GlobalDairyTrade began in 2008 and is owned by Fonterra but operates independently, with products sold including whole and skim milk powder.

The auction platform has sold product worth more than US$5 billion ($6.4 billion), with about 500 qualified bidders from more than 80 countries.

NZX Agrifax dairy analyst Susan Kilsby said GlobalDairyTrade had been a success and that before the online auction system there had been no transparency in prices.

"Now it's really clear what the prices are on a fortnightly basis and they are very closely watched even by people who may not be buying or selling on it but using other sources," Kilsby said.

The prices from the auction dictated the market in general for Oceanic product and the more parties that joined the platform the greater its credibility.

Murray Goulburn was established in 1950, has a head office in Melbourne and 2580 supplier shareholders.

The company processed 2.9 billion litres of milk in its 2011 financial year, accounted for about 32 per cent of Australian milk volume and had revenue of A$2.3 billion ($3 billion).

Murray Goulburn managing director Gary Helou said GlobalDairyTrade was an efficient, transparent and independent method of selling dairy products on the global market.

Lactose was growing in importance in the marketplace, he said.

It was driven by increased demand for it for products such as infant formula and other nutritionals, Helou said.

Murray Goulburn was confident its involvement would provide benefits to shareholders and customers.

Helou said: "Offering lactose on GDT will further develop the market for this product and has the potential to reduce volatility and provide more reliable price discovery for buyers and sellers."

GlobalDairyTrade
* Started in July 2008.
* Products include whole milk powder.
* More than US$5 billion in sales.
* About 700,000 tonnes of trade a year.
* Bidders from more than 80 countries.