Fonterra set to report record milk production this year

By Jason Krupp

May 17 (BusinessDesk) - Fonterra Cooperative Group, the world’s biggest dairy exporter, says it is on track to report record production for the 2010/2011 season, after a mild autumn resulted in record pasture growth.

With two weeks in the season still to go, the dairy giant said production is 4% ahead of the 1.3 billion kilograms of milk solids collected last year, when farmers were experiencing dry or drought conditions.

"Exceptionally favourable pasture growth conditions since January mean our farmer shareholders have enjoyed strong production around the country, particularly north of Taupo," said Fonterra's general manager of milk supply, Steve Murphy. "This is a real turnaround from earlier in the season when many of our farmers were struggling with a cold and wet spring. This, coupled with an early December drought, depressed production levels dramatically."

The announcement comes ahead of the group's globalDairyTrade online auction tomorrow, where milk powder prices have been trading near record highs over the two most recent auctions, and were last at US$4,367 per tonne. Tomorrow's event will include cheddar cheese on the auction block for the first time.

The impact of the increased supply on milk powder prices will be closely watched by the local market, particularly as global commodity prices have slipped 6.2% on the Thompson Reuters Jefferies CRB Index since Fonterra's last auction on May 4. The index is a broad measure of the price of 19 raw materials, including so-called hard commodities such as oil and precious metals.

Murphy said the excellent pasture growth bodes well for farmers going forward, with herds in good condition ahead of the calving season.

(BusinessDesk)

BUDGET 2012:
Parliament Debate Live - Video Of Budget 2011
Keith Ng Interactive Graphic: How the Budget Breaks Down
BUDGET 2012 - FULL COVERAGE: Reports / Analysis - Press Kit - Reaction (from everybody) - Previews (from everybody) - Pre-Budget Announcements

Gordon Campbell: On the Budget’s Spreadsheet Victories

It wasn’t as if expectations were sky high, exactly. Chances are, it was always more likely that we’d be seeing Bigfoot rampage through the Beehive lock-up than catch a glimpse of a credible growth agenda from this government. More >>

Sludge Budget Report - Short The Dollar! MEMO: To international bankers FROM: C.D. Sludge Please short the dollar! It'll be good for both you and us. And you know you want to. Greexit, Eurogeddon... watch out... flight to quality and all that. Follow your instincts. The NZ Debt Management Office has been so surprised at the unprecedentedly low interest rates that it can borrow at that it has already entirely pre-funded the 2013 fiscal deficit - all $8 billion of it! More >>

Pattrick Smellie Comment: Doddling along the best we can hope forCriticising Budgets for lacking vision or imagination is like shooting fish in a barrel, but even so, this year's Budget again feels like a missed opportunity. Perhaps it's the intrusion of real world needs that means the government couldn't make better political use of the $558.8 million it expects to gather in its first partial asset sale. More >>