It’s just fallen for the third consecutive time, down 3.6 percent overnight in the GlobalDairyTrade online auction, and it’s at its lowest level since the end of 2014.
Federated Farmers dairy chairman Andrew Hoggard says the trend makes a lift in this season’s payout less likely.
«We really do need to see some signs of a recovery, and so far we are not seeing them,» he said today.
«The Chinese market is weak, European exports to Russia have been dislocated, dairy regions around the world have enjoyed good weather and the northern hemisphere is awash with cheap feed grain.»
Mr Hoggard says there’s not much the industry can do about those issues.
«Struggling farmers need to talk to their banks and their accountants,» he said. «Especially in the drought areas there is a real need to keep a close eye on how much feed farmers have on hand and how much they will need through to the spring.»
The Labour Party says a $7 billion economic black hole is opening up.
«The economic black hole from the fall in milk prices is getting bigger and bigger,» says Labour’s Grant Robertson.
«Since the February 2014 peak, prices have fallen 51 percent. That will see a large fall in the Fonterra milk payout to farmers.
«If the price keeps falling, or even stays where it is, Fonterra’s payout will be significantly lower than forecast.»
Mr Robertson says many small communities are almost solely reliant on dairy farming and the government’s over-reliance on the dairy industry to grow the economy has backfired.
Source: 3News