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Back to top 1 April 12, 2013
DAIRY COMPANIESMEXICO: Sigma buys cheese companyNZ: Synlait capital raisingSOUTH AFRICA: Pfizer Nutrition rebrand
FARMGATE ISSUESIRELAND: Price increase callsUS: Dairy Security ActAUS: Milk lessons from UK
INDUSTRY STAKEHOLDERSUS: Raw milk debateUS: World Dairy Expo upgradeUK: Dairy producer summit
EXPORTS AND TRADEAUS: Butter exports growNZ: China deals signedGlobal market overview
MANUFACTURING R&DUS: Milk packaging awardUS: Dannon sugar cutNew mixing solution
MARKETINGSWITZERLAND: Activia health claim approved
CONSUMERCHINA: No evidence on concernsUK: Formula rationing measuresUS: Mac’n’cheese dye petition
THE CHINA EQUATION This week’s visit to China by New
Zealand Prime Minister John Key, accompanied by other politicians and business leaders, has generated a flurry of political and commercial deal-signing. Coinciding with these have been approval for Chinese company Yashili to build a large processing plant in New Zealand – the first standalone Chinese enterprise in the country, although Yili, Shanghai Pengxin and Modern Dairy also have interests in New Zealand dairy enterprises. Fonterra has built a strong foundation in China and is looking to increase its involvement there. But although the accelerating level of co-operation between China and New Zealand in the dairy arena is generally seen as positive for both countries, some New Zealanders do have concerns.
When the Crafar farms were sold to Shanghai Pengxin, there was resentment among some New Zealand farmers that the nature of the sale – selling all 16 farms
in one lot – meant they were effectively shut out. There was a feeling that selling the farms individually would have made it possible for New Zealanders to buy them. Yashili’s plans for a major processing plant are also causing some concerns in the small town of Pokeno, where the plant will be built.
A few locals believe a major industrial facility will irreversibly change the nature of their small, sleepy rural town, and they’re not keen. However, the arrival of 100-plus jobs in an area that doesn’t have too many employment opportunities is likely to trump lifestyle issues.
There is, underneath this, probably an element of fear that a nation the size of China may be in a better position to dictate terms than New Zealand. What people possibly don’t realise is the demand for “clean, green” New Zealand products could give New Zealand the upper hand, as consumer demand is king.
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Dairy commodity price movements were mixed this week. The Agrifax price series saw milk powder prices easing back from their record highs. The volume of product being traded at present is limited due to extremely tight supplies.
Exporters will soon move their focus to new season product. The next GlobalDairyTrade auction again has limited volumes of product available, especially in the nearby delivery contracts. The volumes offered by Fonterra are as per forecast and identical to that on
offer at the previous auction. It is really anyone’s guess as to what prices will do at the next auction. Volumes are low so there is likely to be sufficient buyers participating who are willing to pay very high prices to secure product.
As a result prices are expected to remain high but could drop slightly from the previous auction or alternatively head higher still. In Europe prices have moved higher again this week and therefore the pricing gap between origins is beginning to close.
DAIRY MARKET REVIEW April 12, 2013
Agrifax Commentary:
Agrifax USD per tonne
12-Apr-13 05-Apr-13 29-Mar-13 22-Mar-13 15-Mar-13 13-Apr-12
Butter 4300 4300 4300 4180 4000 3350
Skim Milk Powder 5700 5900 4185 4200 3850 3100
Whole Milk Powder 5700 6000 5300 5350 4340 3200
Cheddar Cheese 4400 4150 4150 4150 4100 3950
Casein 10050 10050 10050 10050 10050 9050
Week ending April 12, 2013 www.dairyweek.com
The weekly bulletin on the Australian and New Zealand dairy industry and international markets
DAIRY WEEK
Back to top 2 April 12, 2013
DAIRY COMPANIES
Mexico’s Sigma buys Costa Rica’s leading cheese producerGlobalpost.com, April 4, 2013
Sigma Alimentos, a unit of Mexico’s Grupo Alfa, acquired Corporacion de Empresas Monteverde, Costa Rica’s leading producer and marketer of cheese, Grupo Alfa representatives told Efe Thursday.
The deal, whose value was not released, will expand Sigma Alimentos’s presence in Central America since Corporacion de Empresas Monteverde exports cheese to Nicaragua, Panama and El Salvador.
“Monteverde is the market-leading company in the mature cheese segment in Costa Rica, marketing them under the Monteverde and Lekkerland brands,” which have “great prestige” among consumers, the Grupo Alfa representatives said.
FULL STORY
Synlait Farms directors will be deciding soon how much they should seek in a capital raising and what new investors should be targeted.
An investor presentation in March indicated about $36 million might be sought from existing and new investors but no decisions had been made yet, chairman Barry Brook said.
The board met on Friday but was not expecting to make any announcements immediately afterwards.
“A lot of work has been done so it shouldn’t be too long,’’ Brook said.
The central Canterbury corporate dairy farmer’s shares listed on the Unlisted platform on March 26, but at the time of writing there had been no trades in the six trading days since.
There was a seller at $1.15c and a buy order at 75c and another at 65c. Synlait Farms has an indicative net tangible asset backing of $1.45 a share.
Buyers are likely to be waiting for more certainty on future funding before going into the market for shares.
FULL STORY
NZ: Synlait Farms ponders capital raisingAgrihq.co.nz, Tim Fulton, April 5, 2013
In February 2013, the South African Competition Tribunal approved Nestlé’s $11.85bn takeover of Pfizer Nutrition. Under the terms of the merger approval, Nestlé is required to license out Pfizer’s infant formula brands in South Africa to an independent licensee for a period of 10 years.
The licensee will be under obligation to re-brand the products for the period.
This 10 year re-branding period will be followed by an
additional 10-year ‘black-out’ period. During this time, Nestlé is not permitted to re-introduce the Pfizer brand in South Africa.
The remedy, which was recommended by the South African Competition Commission, was designed to prevent an increase in the price of infant formula that could have resulted as Nestlé’s share of the market grew.
FULL STORY
South African Pfizer Nutrition re-brand will create ‘viable competitor’ to Nestlé – anti-trust authorityDairyreporter.com, Mark Astley, April 5, 2013
Back to top 3 April 12, 2013
DAIRY COMPANIES
Saudi Arabian dairy producer Almarai Co said its first quarter net profit was 255 million riyals ($68 million), a 5.4% rise over the same quarter of 2012 but a 30.9% drop from the previous quarter.
The company said in a bourse statement on Saturday it
attributed its year-on-year profit growth to increased revenue in all its products.
FULL STORYFULL RELEASE
Saudi dairy producer Almarai says Q1 net profit grew 5pc in yearReuters, Angus McDowall, April 6, 2013
Jharkhand Dairy Project has mooted a proposal before the state administration to expand operations in all districts, an ambitious plan that includes a bid to restructure it as a corporation and bring all milk unions under it following its divorce from a national board.
The project, which functions under the state animal husbandry department, made the proposals after the collapse of its five-year partnership with the National Dairy Development Board (NDDB) following an ugly spat on December 6, 2012.
NDDB was roped in to boost the prospect of dairy industry in
the state.According to an MoU signed in 2007, the board had to focus
in five districts - Ramgarh, Hazaribagh, Khunti, Lohardaga and Ranchi - for milk procurement that could directly benefit 41,500 local farmers.
The board had cited an uncooperative stance of both the state project and the government as reasons for its decision to pull out from Jharkhand.
FULL STORY
INDIA: Amul model for dairy project expansionThe Telegraph, Veehay Deo Jha, April 7, 2013
Yashili’s New Zealand boss has signalled the $212 million processing plant the Chinese dairy company will build in Pokeno is just the first step in developing its Kiwi footprint.
“Internally we call this a stage one project. There is absolutely a chance for further growth and continued investment in New Zealand,” says Yingxiang Zhao who is general manager of Yashili New Zealand dairy.
That $212 million deal - which gained Overseas Investment Commission approval 10 days ago - will be the first Chinese milk processing plant to be set up in New Zealand.
“Everybody knows New Zealand has an image for quality, which is especially strong in the dairy industry,” says Zhao.
Yashili already sources milk powder from New Zealand, which it uses to market its own product with slogans such as “Genuine New Zealand, Love from Yashili” and “100% imported from New Zealand’s milk source”. It first imported New Zealand milk products to China more than 10 years ago.
FULL STORY
NZ: Chinese dairy firm eyes NZ futureNew Zealand Herald, Alexander Speirs, April 8, 2013
A year ago, Fonterra’s Theo Spierings was wooing Shanghai Pengxin over potential multi-regional partnerships to develop milk pools in China. Now it is Spierings’ turn to be courted by powerful China Inc: major SOEs like China Investment Corporation (CIC), food conglomerate Cofco and the China Development Bank.
Says Spierings: “Their thinking is ‘how can we have a Chinese Fonterra’, because they love the New Zealand model.
“We have had good talks with Cofco,” he says. “They have a stake in Modern Dairy and Mengniu so they are facing the same issue as us. They have a milk wall on one side and a branded business on the other and no connect or not a good connect.” But for Cofco to try to emulate the Fonterra model is no simple
matter. Modern Dairy and Mengniu are each listed companies - they are not co-operatives.
Spierings is regretful the Pengxin talks have petered out (Pengxin says “Fonterra needs to grow Chinese feet”: that is, move faster).
“But Fonterra is so important to China we need to connect at that level rather than provincial level,” he says. “I was thinking only from a business perspective but I have to think from the country’s perspective. So I’ve had second thoughts, I’ll be honest.”
FULL STORY
NZ: Fonterra’s new China planNew Zealand Herald, Fran O’Sullivan, April 8, 2013
Back to top 4 April 12, 2013
DAIRY COMPANIES
The Irish Dairy Board saw profits increase in 2012 on the back of higher revenue boosted by a 7% increase in branded sales volumes.
The co-operative, which owns brands including Kerrygold butter, reported a 5.8% rise in pre-tax profits before exceptionals to £16.3m (US$21.3m). EBITDA was up 10.8% at EUR42.1m.
“The group achieved solid earnings growth, despite challenging conditions in the first half of the year,” Kevin Lane, the IDB chief executive, said.
FULL STORY
IRELAND: FY profits up at Irish Dairy BoardJust-food.com, Dean Best, April 9, 2013
Devondale (Murray Goulburn Co-operative Co. Limited), the Australian farmer Co-operative, today announced a landmark, ten-year partnership to supply Coles with daily pasteurised milk for its private label brands in Victoria and NSW from July 2014.
Separately, the Co-operative will also relaunch Devondale-branded daily pasteurised milk, through an initially exclusive agreement with Coles, and Devondale cheese will return to Coles’ shelves.
The milk price paid by Coles under this unique agreement
locks in a premium that will deliver additional profits to Devondale dairy farmers over the life of the contract. The premium is not affected by price fluctuations in international dairy markets or movements in the Australian currency and the contract contains rise and fall provisions to protect the premium farmers receive.
FULL RELEASE
AUS: Devondale enters daily pasteurised milk marketMurray Goulburn, April 10, 2013
First Milk has insisted it is still negotiating with its buyers to stave off a price cut for milk producers, following fevered speculation that cuts on the co-op’s cheese contracts are imminent.
First Milk has indicated in recent weeks in public statements and in discussions with industry representatives that it will be forced to cut the price it pays farmers for milk for cheese unless it can secure price increases from its customers, which include Morrisons, Asda and a number of food service companies. It is
thought that any cuts, likely to be in the region of 1.5-2ppl, that are made would come in from the start of June.
The uncertainty of the possible First Milk price cut, which it is feared could pull down prices elsewhere in the market, provoked a heated discussion during an NFU dairy summit, in Warwickshire, on Thursday.
FULL STORY
UK: First Milk insists milk price cuts could be avoidedUK Farmers Guardian, Alistair Driver, April 11, 2013
Back to top 5 April 12, 2013
PEOPLE MOVEMENTS
UK: First Milk’s Bill Mustoe to ‘pass on the baton’UK Farmers Guardian, Howard Walsh, April 5, 2013
First Milk members learned by letter today chairman Bill Mustoe, having just turned 70, has decided to hand over the chair.
He said: “Throughout my career I’ve learned there’s always a right time to pass on the baton.“So with a settled management team and a clear strategy in place, this AGM just seems the most appropriate
time.”Mr Mustoe admitted he knew very little about the dairy industry when he came to First Milk – but knew how
a business should be run.“There have been plenty of challenges along the way, especially over the first year, but once we made the big
changes which were necessary we were off and running.”
FULL STORY
Executive Vice President and director of Arla’s Swedish market, Christer Åberg, has decided to accept a position in the Oslo-based company Orkla and will therefore leave Arla Foods after four years with the company.
“Christer has done an excellent job as responsible for the Swedish and Finish markets as well as within his work in Arla’s Executive Management Group. We would have liked to have kept him in Arla, but I wish him the best of luck in his new position,” said Arla Foods CEO Peder Tuborgh.
Christer Åberg is pleased with his time in Arla Foods and underlines that the decision to leave the company has not been easy.
“I have enjoyed working in Arla, but I have been offered new and exciting challenges, which I have chosen to accept,” said Åberg.
FULL RELEASE
Arla Foods to find new director for SwedenArla Foods, April 8, 2013
Back to top 6 April 12, 2013
FARMGATE ISSUES
IRELAND: Calls for delivery of 35c per litre for dairy farmers after market spikeIrish Examiner, Joe Dermody, April 4, 2013
Co-ops must deliver 35c per litre to dairy farmers to reflect a 40% spike in global milk markets and to ease the burden of soaring fodder costs, says ICMSA deputy president Pat McCormack.
Kerry has confirmed that it will pay its suppliers 35cpl for all milk supplied in March. A spokesperson for Kerry said the 2cpl increase was due to a strong global milk price caused by the drought in New Zealand.
“The lower milk output in France, Germany, the UK and here in Ireland has affected the sentiment in the marketplace, making buyers more keen to trade,” said the Kerry spokesman.
At the Global Dairy Trade Auction, Fonterra’s price rose 14.2% in the last two days, up almost 40% in all over the last six weeks.
FULL STORY
Milk prices for Midwest dairy farmers would have been more than $1.00 per cwt. higher last year if the proposed federal Dairy Security Act (DSA) programme had been available to them, a national dairy industry official told cooperative farm leaders gathered here on Wednesday for the Minnesota-Wisconsin Dairy Policy Conference.
Jim Mulhern, Chief Operating Officer for the National Milk Producers Federation and a Wisconsin native, said a farmer with 200 cows, who purchased margin coverage at a level of $6.50 per cwt., would have received more than $44,000 in additional payments in 2012 under the Dairy Security Act that
is now pending before Congress.“The DSA was designed for the type of conditions we
experienced last year: high feed costs and weak farm milk prices,” Mulhern said. “If DSA had been in effect, dairy farmers who chose to participate in the programme would have received margin insurance payments to cover increased costs and would have had to make only small reductions in milk output under DSA’s market stabilisation programme.”
FULL STORY
US: Dairy Security Act would have increased farm milk prices more than $1.00 per cwtAgweb.com, April 4, 2013
If the UK experience is anything to go by, farmers whose milk is contracted direct to a supermarket’s house brand range are slightly better paid than those supplying the mainstream processing sector.
Most British dairy farmers, however, are far from happy with their farmgate milk prices, particularly after a year of unseasonally wet, cold and low production conditions.
While details of Woolworths payment plans in Australia are under wraps, current premiums for British private label milk are equivalent to three to four pence a litre more than the average
paid to most suppliers.But the specially contracted supermarket suppliers do pay
a price (of sorts) for their close ties to British retailing’s big names like Tesco, Sainsbury’s, Waitrose, Marks and Spencer, Morrisons and Asda.
“The contracts are very strict. You could probably be described as a glorified employee of the supermarket,” says Somerset farmer and former Tesco supplier, Michael Lambert.
FULL STORY
AUS: Lessons from UK milk experience Queensland Country Life, Andrew Marshall, April 5, 2013
Back to top 7 April 12, 2013
FARMGATE ISSUES
A trial to give dairy farmers a better deal and customers a range of new milk products is one step closer with Woolworths and a group of farmers from the Manning Valley in NSW confirming they are looking to strike a direct commercial agreement.
The farmers lodged a collective bargaining notification with the Australian Competition and Consumer Commission (ACCC) to allow them to collectively bargain with Woolworths. An answer from the regulator could be expected within two weeks.
A successful notification will give the farmers immunity for collective bargaining to negotiate a landmark deal with
Woolworths that will allow them to trial the supply of milk directly to the retailer in what will be an Australian supermarket first.
Woolworths wants to stock homogenised and unhomogenised milk sourced directly from the Manning Valley farmers in stores in NSW by the middle of the year. Under the trial, the milk will be marketed under a new brand that will be jointly developed by the farmers and Woolworths.
FULL STORY
AUS: Woolworths to partner with Manning Valley Dairy Farmers on milk trialRetail World, April 5, 2013
It looks likely that Ireland will finish the 2012/2013 milk quota year between 3% and 4% under quota when the final figures are calculated.
The exceptionally wet summer and autumn months of 2012, slow spring grass supplies and forage shortages have all combined to reduce national milk supplies.
The final figures are still being calculated, but if someone had predicted last March that Ireland would be under quota at the start of the year they would have been laughed at.
With no chance of the country exceeding quota, milk processors collected milk all day and night last Sunday, pushing as much milk as they could into the last day of the 2012/13 quota year.
It means that, for some processors, March supplies will be up on 2012, and indeed well up on previous years, but this did not change the overall national position.
FULL STORY
IRELAND: Milk quota year ends 3% to 4% underIrish Farmers Journal, Jack Kennedy, April 6, 2013
In stark contrast to escalating angst across most of Australia’s dairying regions, it’s been revealed this week Tasmanian producers have big plans in place to grow production.
Dairy Australia’s manager strategy and knowledge Joanne Bills provided the crowd at the Tasmanian Dairy Conference last week, held at Burnie, with a sneak peek into the results of the latest National Dairy Farmer Survey.
The results showed the number of Tasmanian dairy farmers expecting to grow production over the next three years had risen to 61%, up from 50% in 2012.
“For Tassie - given the investment going on in the State - this is important,” Ms Bill said.
FULL STORY
AUS: Tasmania dairy growth plansQueensland Country Life, Louise Preece, April 9, 2013
Hundreds of dairy farmers from across Europe will be travelling to Germany this week to demand more flexibility in the milk supply chain and protest against milk prices not covering costs of production.
European Milk Board (EMB) member organisation BDM (Bundesverband Deutscher Milchviehhalter) is organising the demonstration in Berchtesgaden, Upper Bavaria, from April 10
to 12.Farmers will journey in convoys of tractors for the protests,
which coincide with a meeting of Germany’s federal and regional ministers for agriculture.
FULL STORY
EU milk producers plan mass price protestUK Farmers Weekly, Philip Case, April 8, 2013
Back to top 8 April 12, 2013
FARMGATE ISSUES
The anticipated increase in EU milk production following the abolition of quotas in 2015 is likely to result in greater market volatility, The Dairy Group has warned.
Dairy producers should be aware of the sensitivity of markets to supply changes - an example being the recent 20% leap in prices at Fonterra’s auction on the back of a late season drought in New Zealand and Australia. Together with a delayed spring in the northern hemisphere, this has resulted in a commodity price hike, said consultant Nick Holt-Martyn.
An increase in production of just 1% in the top eight EU producing countries - France, Germany, Ireland, Italy, the Netherlands, Poland, Spain and the UK - which account for 83% of EU milk deliveries, would be the equivalent of an average New Zealand increase in growth. This has been 1.234m tonnes a year over the past four years on average, said Holt-Martyn.
FULL STORY
EU: More market volatility likely post milk quotasUK Farmers Weekly, Gemma Mackenzie, April 9, 2013
The milk war that crippled the dairy industry may be about to end, with Coles announcing a deal with co-operative Norco to supply milk into southeast Queensland.
The deal will cut out the Italian-owned milk processor Parmalat and will mean Norco will spend “several million’’ dollars upgrading its Labrador facilities on the Gold Coast to handle a significant boost in volumes.
It will also mean farmers in the Lismore based co-operative
will be paid a premium for milk.Norco said Queensland farmers will get the opportunity
to supply milk into the deal, which provides a better price for farmers, but does not control the price Coles will set the product for.
FULL STORY
AUS: Coles milks deal with farmersNinemsn.com.au, Mike King, April 10, 2013
Snjezana and Mladen Solcic’s farm in the village of Patkovca, Croatia, has a modern appearance. It is equipped with the latest devices and inhabited by more than 500 animals of quality dairy breeds. Along with nine employees, the Solcics work 100 hectares of land, producing food for livestock. Cows give thousands of litres of milk a day.
Since 2004, Mladen Solcic has invested £2.6 million in the farm. But the price of milk has fallen for months, the costs of running the farm are rising, and the state discontinued aid
through a capital support programme, which paid 25% of his investment. Worse, said Solcic, is that each month they must repay the bank loan. Croatian loan rates range from 3 to 8%.
Snježana and Mladen are trying to avoid low industry prices by selling directly to consumers through a vending machine they placed at a market in the nearby town Bjelovar.
FULL STORY
CROATIA: Regional dairy farmers turn to vending machinesSEtimes.com, Kruno Kartus, April 10, 2013
Back to top 9 April 12, 2013
INDUSTRY STAKEHOLDERS
US: Raw milk law amendment would not ‘mitigate’ dangers – FDADairyreporter.com, Mark Astley, April 4, 2013
The US Food and Drug Administration (FDA) has rejected a petition that sought an exception to the current ban on the inter-state sale of raw milk products – citing a lack of proof that the amendment would “adequately mitigate the dangers posed by raw milk”.
The petition was filed by raw milk product manufacturer, Organic Pastures, in 2008. The company requested an amendment to CFR 1240.61 – the regulation that prohibits the distribution of dairy products made from unpasteurised milk across US state lines.
The sale of raw milk for human consumption is currently legal within the borders of several US states, including Washington, California, Pennsylvania and Utah. In its petition to the FDA, California-based Organic Pastures requested an exception to the current inter-state ban on sales.
FULL STORY
World Dairy Expo is what some have called the “Super Bowl” of the dairy industry, giving host city Madison, Wis., and the surrounding area a $50 million boost as 65,000 producers and industry professionals from more than 90 countries gather at the world’s largest dairy-focused event.
Now, Wisconsin Agriculture Secretary Ben Brancel has a
simple message for the Assembly Agriculture Committee – ignoring the Alliant Energy Center, home of the World Dairy Expo and other events, is simply not an option.
FULL STORY
Push on for World Dairy Expo to get $18 million upgradeDairyherd.com, Angela Bowman, April 8, 2013
After the SOS dairy campaign, the introduction of a voluntary code and continued dairy market volatility, dairy farmer representatives have the chance to debate the future of the industry this week at an NFU led summit.
The Dairy Producer Representative Summit on Thursday April 11 will feature a number of industry leaders and cover a wide range of supply chain issues including the voluntary code for contracts, the registration of producer organisations and the
dairy market place.There will be an expert line up of speakers including NFU
dairy board chairman Mansel Raymond, Defra head of dairy policy Richard Jones, AB-Agri commodity trader Hugh Burton, senior Promar consultant Derek Gardener and dairy futures specialist Liam Fenton of FC Stone.
FULL STORY
UK: Dairy producer summit to address key industry issuesFarminguk.com, April 9, 2013
Back to top 10 April 12, 2013
INDUSTRY STAKEHOLDERS
Raw milk may soon be available in Montana and Arkansas as lawmakers from both states move closer to legalising unpasteurised dairy products, according to Food Safety News.
In Montana, the state House backed the bill in late March, and now the bill is in front of the Senate Agriculture, Livestock and Irrigation Committee, which could give the bill a “do pass” recommendation soon. If passed, it would create a small herd exemption from current mandatory milk pasteurisation requirements.
In Arkansas, the House revived a raw milk bill previously killed by committee and passed it in a 60 to 19 vote. The bill, HB 1536 would permit the sale of raw milk from cows and goats
on the farm where it’s produced as long as the amount sold does not exceed 500 gallons per month. It would also require farmers to post a sign informing consumers that the milk is neither pasteurised nor inspected by the state.
In both bills, consumers would be responsible for illnesses resulting from consuming contaminated raw milk products. It’s this risk of illness that has prompted health officials and dairy farmers alike to voice their concern about the potential health hazards of raw milk.
FULL STORY
US: States move to legalise raw milk salesDairyherd.com, Angela Bowman, April 9, 2013
Dairy products play a vital role in disease prevention, and could save the US healthcare system billions if consumers ate them at recommended levels, according to the Dairy Research Institute (DRI) president.
Gregory Miller said that dairy products offer great nutritional quality at a pretty low cost, with research supporting their association with reduced risk of type-2 diabetes and CVD, as well as better bone health.
He added that recognition of dairy as a source of high quality, easy-to-digest protein was also growing.
“Few foods deliver dairy’s powerhouse of nutrients in such an affordable, appealing and readily available way. Milk and milk products are an accessible and affordable source of important nutrients, including protein,” Miller said.
“Dairy foods are some of the most efficient and affordable sources of nutrition available,” he added.
FULL STORY
‘Quality’ dairy nutrients could slash US healthcare costs by billions: DRI presidentdairyreporter.com, Ben Bouckley, April 10, 2013
Back to top 11 April 12, 2013
EXPORTS AND TRADE
AUS: Butter makes it better on international marketsAbc.net.au, Flint Duxfield, April 5, 2013
The latest figures from Dairy Australia show significant growth in Australian butter and skim milk exports.Butter exports are up nearly 60% on this time last year, with skim milk powder also up by a third.Dairy Australia’s commercial research manager Norman Repacholi says he expects the strong demand will
result in price increases.
FULL STORY
Four major Chinese players are now in the NZ dairy space.Pengxin chairman Jiang Zhaobai has planned a signing
ceremony in Shanghai tomorrow to mark an emerging deal with Miraka to process milk from the Crafar farms into UHT products for export to China.
Pengxin executives said the deal was expected to be signed at the conclusion of a lunch for the visiting NZ business delegation at the Banyan Tree hotel.
The signing ceremony will involve Pengxin, Miraka and iwi.
The Crafar farm saga took more than two years to reach a conclusion after a lengthy court battle with Sir Michael Fay and two iwi.
“We very glad we come through the difficulties,” says Jiang.”This is just a beginning and not the end for Pengxin and other companies that come.
FULL STORY
NZ: Signing off on the big dealsNew Zealand Herald, Fran O’Sullivan, April 8, 2013
Retailers have been asked to ration sales of baby milk powder by the manufacturer of Britain’s two most popular brands after evidence that the products are being bought in bulk for “unofficial export” to China, where demand is high for foreign-made milk.
Danone, which makes Aptamil and Cow & Gate – the market leaders in the UK – has asked supermarkets and chemists to limit purchases to just two 900g tins per purchase. Asda, Sainsbury’s, Tesco and Morrisons have already agreed to limit
purchases to two units per customer and more retailers are expected to follow suit.
Danone said the limit was to prevent some individuals from bulk buying baby milk for commercial purposes, for “unofficial exports”. In some cases the milk is being sent abroad to relatives, but it is also being sold on the internet.
FULL STORY
UK: Baby milk powder rationing introduced by supermarketsGuardian.co.uk, Rebecca Smithers, April 8, 2013
Back to top 12 April 12, 2013
EXPORTS AND TRADE
Improving market access and developing free trade agreements are top of dairy’s election wish-list.
A policy document was released by the Australian Dairy Industry Council at a business breakfast in Melbourne last week.
The document, by the whole of industry lobby group, includes policies about markets and trade, people and the workforce, sustainability, animal health and biosecurity.
ADIC chairman Noel Campbell said pushing for FTAs with South Korea, China and Japan were industry priorities.
He said investor-state dispute legislation, which is dispute settlement using international law, had prevented FTAs in the past.
FULL STORY
AUS: Free trade pushWeeklytimesnow.com.au, Simone Smith, April 10, 2013
The chief of the massive co-operative structure that comes under the Amul umbrella has raised issues that have long been central to India’s dairy sector but still remain relevant. R S Sodhi, managing director of the Gujarat Co-operative Milk Marketing Federation, which owns the Amul brand, has cautioned the government against making concessions in the free trade agreement (FTA) being negotiated with the European Union (EU). He fears that such concessions would undermine the model that has worked successfully for over four decades now. While a successful resolution to the negotiations of an EU-India FTA is essential, Mr Sodhi’s point deserves the
negotiators’ attention. After all, the task the country set out to achieve when Lal Bahadur Shastri asked Verghese Kurien to replicate the highly successful Anand experiment all over the country has been only partly achieved. India is today the largest milk producer in the world and per capita milk availability is going up steadily, if slowly. Some African countries survive on artificially priced imported milk powder, unable to grow their own healthy dairy sector in the face of import competition.
FULL STORY
INDIA: Protect the Anand modelBusiness-standard.com, April 11, 2013
An agreement struck with one of China’s largest dairy companies will help New Zealand sell its agricultural know-how to China.
Government-owned AsureQuality, which provides food safety and biosecurity services, and PwC last night signed a “collaboration framework agreement” with China Mengniu Dairy Company and COFCO Corporation – China’s largest food processor.
The aim is to investigate the development of a China New
Zealand agribusiness service and food safety centre of excellence in the Asian giant.
Initially, the parties will work together on a dairy-related food safety and farm assurance project. But it is expected more of New Zealand’s agriculture-related companies and research entities will become involved down the track.
FULL STORY
NZ: Food safety agreement with China dairy giantsNational Business Review, Georgina Bond, April 11, 2013
Back to top 13 April 12, 2013
EXPORTS AND TRADE
The United Nations flagged the extent of the squeeze on dairy supplies which has sent prices soaring as Fonterra revealed a sharp drop in New Zealand milk deliveries, and concerns mounted over the impact of a cold northern hemisphere spring.
The UN food agency, the Food and Agriculture Organisation, said that dairy prices, as measured by its index, had risen by 11.0% last month “one of the largest recorded” – in fact, the biggest monthly increase since late 2009 – driving overall food prices to a six-month high.
The “exceptional increase” in prices reflected “market
uncertainty as buyers seek alternative sources of supply” in the face of drought in New Zealand, the top exporting country, which in cutting pasture quality has sent milk production tumbling.
Buyers now used to being offered a range of dairy commodities, from whole milk powder to milk fat, were “seeking specific New Zealand products, at a time when production has unexpectedly declined and limited stocks are already committed”, the FAO said.
FULL STORY
UN flags squeeze behind ‘exceptional’ dairy rallyAgrimoney.com, April 11, 2013
Western and Eastern EuropeWestern Overview: Milk production levels in Western
European continue to trend below a year ago in the majority of countries. The biggest factor is the lingering wintry weather conditions across most of the major milk producing countries. Germany, Ireland, France, and the United Kingdom are noted to be tracking lower. The impacts of higher dairy product prices and the subsequent milk price gains are welcomed by milk producers. Fresh milk product sales are indicated to be hampered by cold weather. Prices for skim and whole milk powders are again higher to sharply higher. The impact of higher prices in other regions has buyers searching for countries with offerings. Local buyer interest has also increased as those buyers seek coverage. Butter prices moved higher with good demand noted for local buying needs. Current pricing levels are limiting exports. In March, butter movements into the Private Storage Assistance (PSA) programme totalled 17,000 tonnes, down from nearly 32,000 tonnes a year earlier. The current high pricing points and good demand are major reasons for the downturn in shipments into the PSA. Dry whey pricing is higher. Buyer interest is good for the food quality, but met with lighter offering volumes. Demand is also good for feed quality and those prices are nearly equal.
Eastern Overview: Milk production in Eastern Europe remains at below year ago levels for most countries and has limited growth for others. Snow and cold conditions are reported to be impacting the milk flow in Poland. High feed costs are restricting supplemental feeding. Higher dairy product prices are being welcomed. Offering of finished dairy products are most often light.
Oceania Overview: New Zealand milk production continues to be impacted by drought conditions on the North Island and overall dry conditions elsewhere. At the farm level, the growing conditions for pastures remains poor and cows are being dried off earlier than desired. Other producers are giving supplemental feeding, which is increasing costs of production. Farmers are concerned about cow conditions for the start of the next milk season. News accounts are noting step-ups
in milk prices. Pasture conditions are dry and the stands stressed. Rainfalls are needed to replenish water supplies. Some forecast models are showing rains in the next few weeks. The decline in milk is creating increased management of accounts on the books assessed against holdings and future production. Traders and handlers are being strategic to meet customer requirements. Australian milk production continues to be impacted by dry conditions and the effects of hot weather in recent months. The milk budgets are being forecast lower as the milk season progresses. The impact on product mix at the end of the season will be seen, but the sentiment is that the orders on the books will be serviced. Meeting the local demand is moving more milk towards those needs. Consumer interest is good and clearing expected volumes. Milk production is running below year ago levels as the season winds down. From July - February, the seasonal totals reported by Dairy Australia are running 1.1% lower (unadjusted for leap day in 2012) than during the same timeframe a year earlier. Season through February, unadjusted figures are: New South Wales, -0.6%; Victoria, -0.6%; Queensland -5.5%; South Australia -3.6%; Western Australia -1.5%; and Tasmania -2.0%. Dairy product prices are higher to sharply higher. The impacts of the GDT auction results are creating reactions in the marketplace. Higher prices are creating more tension in the marketplace. Some ingredient buyers are seeking coverage and willing to pay the prices with the ability to cost average the impact of the current market prices against other holdings. Other buyers are out of the market at the current pricing levels. At the April 2 GDT session #89, average prices for the majority of products traded and contracting periods were higher and were sharply higher for skim milk powder. The all contracts price averages (US$ per tonne) and percent changes from the previous average are: anhydrous milk fat, $4695 +6.7%; butter, $4425 -2.7%; buttermilk powder, $4595 +0.8%; cheddar cheese, $4622 +6.6%; lactose, not traded; milk protein concentrate, not traded; rennet casein, $9489 +4.4%; skim milk powder, $5142 +27.8%; and whole milk powder, $5100 +7.0%. The next event, #90, will be on April 16.
Global Market OverviewUS Department of Agriculture, April 11, 2013
Back to top 14 April 12, 2013
MANUFACTURING R&D
Central Michigan professor earns national award for packaging that stores milk at room temperatureMlive.com, Lindsay Knake, April 4, 2013
A Central Michigan University professor has figured out plastic packaging that stores milk at room temperature.And now Bob Howell, chemistry and polymer science professor, won the 2012 North American Thermal
Analysis Society award for his achievement in thermal analysis research. Howell adapted the polymeric materials in packaging, which addresses bad taste in pastries and brown streaking
in milk jugs, and allows companies to transport milk without refrigeration.
FULL STORY
Dairy giant Dannon (Danone) says it spent two years reformulating its Danimals Smoothies for kids in the US to achieve a 25% sugar reduction, as Mintel predicts strong growth for kid-friendly yoghurt drinks with health and wellness benefits in the country for ‘years to come’.
Dannon claims that the successful results of this research, since 2010, meant that it had reformulated the product without
sacrificing nutrients, taste, texture or product convenience.“Over a period of two years, the research and development
team at Dannon deconstructed then reconstructed its Danimals Smoothies to make it easier for parents to provide their children with the nutritional benefits of low fat dairy,” the company said.
FULL STORY
US: Dannon took two years to win 25% Danimals Smoothies sugar cutDairyreporter.com, Ben Bouckley, April 4, 2013
SPX provides leading service and process solutions to the dairy industry. Included within its innovative technologies is the SPX APV ‘Flex-Mix’ series, consisting of seven mixers to meet very broad application requirements including mixing powders, liquids, particulates and even air for high and low viscosity fluids. The technology ranges from simple static and venturi mixers to innovative vacuum mixing provided by the Flex-Mix Instant and Processor models.
For liquid/liquid mixing, the range offers the economic Flex-Mix TPX static mixer which is ideal for blending two simple, low viscosity liquids. It also includes the Dar dynamic mixer which provides more turbulence and is perfect for blending low viscosity with high viscosity fluids in applications such as the low temperature mixing of vegetable oil with butter.
FULL RELEASE
Mixing solution for the dairy industrySpx.com, April 4, 2013
Back to top 15 April 12, 2013
MANUFACTURING R&D
The current cheese market is as challenging as anything Bill Mustoe has seen in his entire career.
He said: “The market place for cheddar is a problem right now. Money is tight for everyone and there continues to be large volumes of cheddar coming in from Ireland at lower prices.
“Over the last few months we’ve supported members to the hilt in terms of milk price, but going forward returns for cheese need to move substantially and quickly. It’s no exaggeration
to say I think we are coming to a crunch point for the British cheese industry,” he said.
Part of the First Milk strategy was to take advantage of opportunities in other categories, in order to mitigate any impact of the cheese market on members. Some 35-40% of incoming milk is processed into cheese by the business.
FULL STORY
UK: Crunch point for British cheese industry – MustoeUK Farmers Guardian, Howard Walsh, April 5, 2013
Total US cheese production, excluding cottage cheese, was 857.4 million pounds in February 2013, less than 0.1% below February 2012’s 857.5 million pounds and 8.4% below January 2013’s 935.7 million pounds, according to preliminary data released Thursday by USDA’s National Agricultural Statistics Service (NASS). (All figures are rounded.)
Italian-type cheese production totalled 361.5 million pounds
in February, down 2.6% from February 2012 and down 9.7% from January 2013. Mozzarella, the most-produced Italian-type cheese, totalled 279.5 million pounds in February 2013, down 4.0% from a year earlier and down 10.3% from a month earlier.
FULL STORY
February US cheese production lower than year, month agocheesemarketnews.com, April 5, 2013
The dairy industry has been through the worst of this season’s production decline, according to Dairy Australia.
In its most recent milk production data, for February, the nation’s production was down 1.1% compared with the same time last year, but down 9.2% for the month.
Victorian production was 0.6% lower than the same time last year, but declined 10.7% compared with February 2012.
Dairy Australia analyst John Droppert said the production decline was a reflection of lack of industry confidence linked to
farmgate milk prices, higher costs and poor seasons.“Confidence starts to suffer when you are taking it from all
sides,” Mr Droppert said.“The worst of it we’ve been through in January and February,
but March is not going to be too flash either with the 10 days over 30 (degrees).”
FULL STORY
AUS: Milk production declinesWeeklytimesnow.com.au, Simone Smith, April 5, 2013
Hyderabad-based Thirumala Milk Products Private Limited (TMPL), in which private equity major Carlyle has invested Rs 100 crore for a 20% stake, is setting up a 400,000-litre per day capacity milk processing and packaging plant at Melmaruvathur, about 90 km from Chennai.
“The construction work is in progress and the plant will be commissioned in a span of six months,” TMPL managing
director, B Brahma Naidu, said on Monday. Naidu said the processing plant had been entirely funded through internal accruals. In 2012-13, he said, TMPL would post a turnover of about Rs 1,500 crore and a net profit of around Rs 110 crore. The company’s turnover in 2011-12 stood at Rs 1,173 crore.
FULL STORY
INDIA: Thirumala Milk setting up Rs 100-cr processing plantBusiness-standard.com, April 8, 2013
Back to top 16 April 12, 2013
MANUFACTURING R&D
At the end of this month, trucks that transport products from the production location to the container port in Leeuwarden will start the switch from diesel to green gas.
This week, the RTL-Z television programme Groen Ondernemen (Green Entrepreneurship) is focusing on the conversion, which will lead to a substantial 80% decrease in CO2 emissions. And the much quieter engines will mean a substantial decrease in noise nuisance. Each year, FrieslandCampina trucks clock some 200,000 transport kilometres between the factory and
the container port in Leeuwarden.For nearly 100 years, the condensed dairy products produced
in Leeuwarden have made their way to consumers around the world. Due to the increasing demand for these products, the company is investing in a substantial expansion of the production location.
FULL RELEASE
NETHERLANDS: FrieslandCampina trucks in Leeuwarden switch to green gasFrieslandCampina, April 8, 2013
US sales of specialty food and beverages rose 14.3% to $86 billion in 2012, more than double the 6.8% increase recorded the previous year, according to the Specialty Food Association’s annual State of the Specialty Food Industry report.
Cheese and cheese alternatives is the largest category with $3.6 billion in sales, followed by yoghurt and kefir, which leapfrogged over other foods for the number two spot with $2.27
billion in 2012 sales. The next largest categories are chips, pretzels and snacks; coffee, coffee substitutes and cocoa, and meat, poultry and seafood. Energy bars and functional beverages stand out as the fastest growing specialty foods.
FULL STORY
US: Cheese leads in sales of specialty foods which is on the riseAdpi.org, April 8, 2013
The Food and Drug Administration is asking for public comment on a request by the dairy industry to add sweeteners to milk.
Sweeteners are already added to some milk - like chocolate milk. But International Dairy Foods Association spokeswoman Peggy Armstrong, says the FDA only allows sweeteners like sugar, honey and high fructose corn syrup. Sweeteners, she says, that contain substantial calories.
“What we’re asking for is to use all safe and suitable
sweeteners, including some zero calorie sweeteners, and still call it chocolate milk, strawberry milk whatever.”
That way, she says, consumers who don’t want as many calories will be better served. But many consumers don’t like the idea of aspartame, sucralose or saccharin being used in their milk, yoghurt and cream.
FULL STORY
US: FDA considering new rules for sweeteners in milk productsOpb.org, Kristian Foden-Vencil, April 9, 2013
The programme dairy processors use to source milk for innovative new products continues to grow.
From November 2012 to January, there were 50 active domestic dairy product innovation programme projects in Ontario that used more than 14 million litres of milk. That’s an increase of four projects and 2.7 million litres of milk over the November 2011 to January 2012 period when there were 46 active projects using 11.3 million litres of milk, according to a report released at Dairy Farmers of Ontario’s spring policy
conference in March. The programme gives processors wanting to make innovative
new products a supply of milk that isn’t part of their existing plant supply quota. It has been in place since 1989 and has been renewed several times. It is set to expire July 31 unless it’s renewed.
FULL STORY
US: Dairy processing innovation programme participation growsBetterfarming.com, Susan Mann, April 9, 2013
Back to top 17 April 12, 2013
MANUFACTURING R&D
Adverts have gone out for 100 new jobs being created at what will become Britain’s biggest butter plant.
The jobs are being created at the £17 million Muller Wiseman dairies plant in Market Drayton, which is expected to open in the autumn.
Jobs being advertised include butter makers and technicians.
Planning permission for the new plant was granted last month. The yoghurt and dessert firm will remodel an existing bottling factory, create a two-storey extension and build 14 new silos at the current base.
FULL STORY
UK: Adverts for 100 jobs at new Muller Wiseman butter factoryShropshirestar.com, April 10, 2013
Fast-growing Waikato exporter Dairy Goat Co-operative is to build a $67 million second powder dryer as overseas and local consumer demand for goat milk formula surges.
The new drier and plant will have four times the capacity of the company’s existing plant, built in 2003, and will support the growth of its 20 markets, chief executive Dave Stanley, said. It will open in August next year.
DGC developed the world’s first goat milk infant formula in
1988 and is the leader is all its markets. The new plant will be built on DGC’s 18-hectare site in
Hamilton. Stanley said milk supply was growing at 15-20% a year to
meet demand.
FULL STORY
NZ: Dairy Goat Co-op expands as milk demand surges Stuff.co.nz, Andrea Fox, April 10, 2013
Synutra International has been given approval from China’s commerce authorities to go ahead with a £100 million (US$130 million) investment project that will result in the construction of a milk factory in France.
The company, based in the city of Qingdao in east China’s Shandong province, said Tuesday that construction will kick off
in France’s western region of Brittany in September.Li Ke, general manager of Synutra, said the company expects
the factory to start production in the first half of 2015.
FULL STORY
Chinese dairy producer Synutra secures French milk factory dealWantchinatimes.com, April 10, 2013
Product rejection and recall costs have the potential to run into the millions. Simply striving to drive up the quality and safety of finished products can reduce, or even avert, these unwanted additional outgoings, dairy processor FrieslandCampina said.
Herman Ermens, managing director of FrieslandCampina Domo – the Dutch dairy giant’s ingredients business – said that dairy product manufacturers need to get into the mind-set that good quality drives down cost.
“In the current economic environment people in all industries are looking to reduce their outgoings and increase their
margins,” said Ermens. “As well as asking us to help them develop new products and to optimise supply chain processes, our customers are constantly asking us to help them reduce their overall formulation costs.”
But according to Ermens, manufacturers should be looking to improve quality assurance across their businesses to reduce costs, not only look for cheaper alternatives to currently expensive ingredients.
FULL STORY
Quality and safety assurance drives down cost – FrieslandCampinaDairyreporter.com, Mark Astley, April 11, 2013
Back to top 18 April 12, 2013
MANUFACTURING R&D
Maori-owned milk processing company Miraka will invest about $25 million in a new plant near Taupo after signing a deal with the new Chinese owner of the former Crafar farms to take its milk.
Speaking from Shanghai, Miraka chairman Kingi Smiler last night told the Waikato Times the firm had signed a memorandum of understanding with the Shanghai Pengxin company for milk supply from some of the 16 former Crafar family farms in the
central North Island. Mr Smiler is in China with a New Zealand trade delegation led
by Prime Minister John Key. Mr Smiler said Miraka would eventually expect to take milk
from about 50 per cent of the Pengxin herd, which is farmed by manager Landcorp over 8000 hectares.
FULL STORY
NZ: New plant for Miraka after Chinese deal Stuff.co.nz, Andrea Fox, April 11, 2013
A milk dairy plant with a capacity of four lakh litres is coming up in the outskirts of Chennai. Thirumala Milk Products Private Limited (TMPL), the Hyderabad -based company is setting the processing and packing dairy plant in Melmaravathur. Recently private equity company Carlyle bought a 20% stake by investing Rs 100 crore. The plant under construction would start production in six months.
The next city where TMPL is entering is New Delhi. It has set apart Rs 50 crore for this purpose. The company has plans to
either buy up any dairy plant in the NCR belt. TMPL has plants and chilling centres in all Southern States except Kerala. In the north, it has operations in Maharashtra, Gujarat, Chattisgarh, Madhya Pradesh and Himachal Pradesh. Spread across this region, TMPL procures milk from two lakh farmers who supply 1.1 million litres. The recent addition by TMPL was the mango and strawberry flavoured milk branded Tringo.
FULL STORY
INDIA: New milk dairy near ChennaiTruthdive.com, April 11, 2013
MARKETING
SWITZ: Danone Activia health claim approvedJust-food.com, Michelle Russell, April 8, 2013
Danone has gained approval for a health claim on Activia yoghurt in Switzerland.The Swiss Federal Office of Public Health (FOPH) has authorised Danone’s claim that its Activia products, the
company’s best selling global brand, “contributes to digestive comfort, reducing transit time and swelling”.Danone said the claim meets with criteria outlined in Swiss law, which requires the effect be proven and based
on “commonly accepted scientific studies”.
FULL STORY
Back to top 19 April 12, 2013
CONSUMER
CHINA: No evidence that Nutradefense infant formula ‘unsafe’ in China – HeroDairyreporter.com, April 5, 2013
Food safety authorities in China have discovered no evidence that Hero Nutradefense infant formula is unsafe to consume, the product’s Switzerland-based manufacturer, Hero, has claimed.
In a statement posted on its website earlier this week, Lenzburg, Switzerland-based Hero said that neither it nor the Chinese authorities had “found any evidence that Hero’s products on the market are unsafe for consumption or not in line with the defined standards.”
The comments follow the launch of an investigation by the Shanghai Food and Drug Administration late last month after television exposé raised concerns about the safety of Netherlands-manufactured Hero Nutradefense.
The report claimed that an importer had mixed expired milk powder into imported Hero Nutradefense before changing production and expiration dates and repackaging them.
FULL STORY
Retailers have been asked to ration sales of baby milk powder by the manufacturer of Britain’s two most popular brands after evidence that the products are being bought in bulk for “unofficial export” to China, where demand is high for foreign-made milk.
Danone, which makes Aptamil and Cow & Gate – the market leaders in the UK – has asked supermarkets and chemists to limit purchases to just two 900g tins per purchase. Asda, Sainsbury’s, Tesco and Morrisons have already agreed to limit
purchases to two units per customer and more retailers are expected to follow suit.
Danone said the limit was to prevent some individuals from bulk buying baby milk for commercial purposes, for “unofficial exports”. In some cases the milk is being sent abroad to relatives, but it is also being sold on the internet.
FULL STORY
UK: Baby milk powder rationing introduced by supermarketsGuardian.co.uk, Rebecca Smithers, April 8, 2013
A month after food bloggers Vani Hari and Lisa Leake launched a Change.org petition calling on Kraft Foods to remove artificial dyes Yellow #5 and Yellow #6 from Macaroni and Cheese products, the petition is in the hands of Kraft representatives.
Hari, the popular food blogger also known as “Food Babe” delivered a petition with more than 270,000 signatures to Kraft’s headquarters in Chicago.
Hari met with Kraft representatives and following the meeting she expressed hope that Kraft would remove the controversial dyes from products sold in the United States.
“In a one-hour meeting with me, and Lisa, Kraft told us they ‘can’t predict the future’ of dyes in Macaroni & Cheese,” she wrote in a press release. “I can give them a preview. If Kraft is anything like the hundreds of other companies facing consumer uprising online, they’ll eventually start listening to their customers and work with us to ensure the health and safety of all Kraft Macaroni & Cheese products.”
FULL STORY
US: Kraft responds to Macaroni & Cheese artificial dyes petitionMetro.us, Mary Ann Georgantopoulos, April 9, 2013
Back to top 20 April 12, 2013
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Dairy Report JULY 2012
GLOBAL DAIRY MARKETS IN HANGOVER MODE
The weather in New Zealand has warmed just a tad over the past month. Early signs of spring are now emerging. Dairy farmers are swinging back into the daily routine of milking. At present the majority of New Zealand’s dairy cows are not in-milk, but seasonal calving is well underway particularly in the northern regions.
Global milk production is now starting to ease. Production in the Northern Hemisphere has begun its seasonal decline and growth rates are being slowed further by low milk prices and adverse weather conditions. A further slowing of global milk production is required in order for markets to recover from the hangover caused by a glut in milk production over the past year. Global demand for dairy commodities is generally sound and the markets should rebalance relatively quickly if global milk production can be restrained. However, with the production season about to get underway again in New Zealand this may be a tall order. Check out pages 2-4 for more coverage of global milk production.
This month Fonterra dropped down a rank in the Rabobank Top 20 dairy company list. This annually revised list rates companies by dairy turnover. In 2011, Fonterra sat at number 3 on the list behind Nestle and Danone, but this year Fonterra slipped to 4th position having been overtaken by Lactalis. Fonterra has long maintained that they need to sort out their capital structure so that they can fully capitalise on opportunities in the global dairy markets. The legal changes required for Fonterra’s Trading Amongst Farmers system to go ahead have now been passed through New Zealand’s Parliament.
Food scandals continue to plague the Chinese dairy market and while these are apparent, consumers will proceed to look to imported dairy products. China is continuing to import dairy products but the product mix being imported is changing. Check out the dairy commodity markets section for more details.
Susan KilsbyDairy Analyst
TABLE OF CONTENTS
Agrifax Dairy Index 2
Milk Production
Global 2
New Zealand 3
Rest of World 4
Dairy Commodity Markets
Prices 5-6
Whole Milk Powder 7
Skim Milk Powder 8
Milkfat Products 9
Dairy Company Milk Price 10
Dairy Company Information 11-12
DAIRY INDEX NZ MILK PRODUCTION SEASON TO DATE
WHOLE MILK POWDER PRICE
AGRIFAX MILK PRICE PREDICTOR 2012/13
2012/13 US$/TONNE NZ$/KG MS
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