CANBERRA: Dairy giant Fonterra reports Australia’s dairy exports rose 9 per cent this past year, amid what it calls “unsustainably low” global dairy prices.
The increase for Australian sales was led by skim milk powder, up 29 per cent, cheese which rose 12 per cent, and fluid and fresh dairy which was up by 10 per cent.
That was a larger increase than New Zealand’s Fonterra dairy exports for the past year, which saw a growth of just 2 per cent for the year to August 2015, and 4 per cent from Europe. China’s demand dropped off in the year to August, particularly for whole milk powder, down 53 per cent.
Overall, dairy imports into China fell by 15 per cent over the past 12 months. But imports of infant milk formula rose 34 per cent and were 21 per cent higher for fresh milk, reported Fonterra in the November 2015 update.
Commonwealth Bank Australia commodities analyst Tobin Gorey said the futures price bottomed in August but had picked up since. “The January contract traded its lowest point in August at US$1,800 ($AUD2,532) per tonne,” he said. “The Friday dairy trade futures contract for January was at $2,000 ($AUD2,813) per tonne.
“We anticipate another round of GDT falls on Wednesday.” In some positive news for dairy, Fonterra this morning announced that its strong financial performance had allowed the company to increase its forecast earnings for 2015/16.
“Fonterra is still forecasting at least a 5 per cent fall in its NZ milk collections (approximately 150,000 tonnes of WMP) for the current season,” Mr Gorrey said. “We expect that will eventually support prices.”