Prices steady but Fonterra payout cut looms

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Fonterra is tipped to cut the forecast price when it announces its final payout for this season and unveils its annual result on Wednesday.

The average winning milk price at the latest GlobalDairyTrade auction was US$2795 ($3408), barely changed from US$2787 at the previous auction two weeks earlier.

ANZ economists said current price levels and Fonterra’s assumed New Zealand dollar hedging position
translated into a milk price about the mid-$4 mark per kilogram of milksolids.

»This is well below Fonterra’s current 2014-15 forecast of $6/kg MS, so you need to see an improvement in prices if this is to be achieved,» they said.

»The [latest auction] result might hold some hope that a turnaround is on the horizon, so the move
might be more towards the mid-$5/kg MS, as opposed to the low-$5/kg MS at this stage.»

ASB rural economist Nathan Penny said the auction results were a »mixed bag», and ASB would revise down its forecast milk price from $5.80/kg.

»Overall, forward prices point to less future price support than previously,» he said.

Westpac senior economist Anne Boniface said there remained little sign of pent-up demand.

»In the most recent event, whole milk powder buyers were willing to pay a similar price for product to be delivered in two through to five months’ time.

»Skim milk powder buyers were willing to pay slightly less for product with later delivery dates. With volumes sold on the GDT platform now near their seasonal peaks, auction out-turns can have a big impact on our payout forecasts.»

Federated Farmers Dairy chairman Andrew Hoggard said that with peak milk about four weeks away farmers could do with some good news.

»While steady as she goes isn’t a plus sign, at least it is not a negative.»

He said he had a »hunch we’re close to or at the bottom, but there’s a heck of uncertainty out there. The Russian situation and dislocation of European Milk is still playing out.»

The trade-weighted GlobalDairyTrade price index was unchanged at the auction at 822 points,
the lowest level since August 2012. Auction volume was down, with 50,801 tonnes sold, an 11 per cent drop
from the previous auction but the second-highest volume this year.

Prices for whole-milk powder, the largest category by volume, increased by 0.6 per cent, while skim-milk powder, which had fallen by more than 22 per cent over the previous two auctions, edged up by 0.9 per cent.

Source: Stuff

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Así lo expresó Domingo Possetto, secretario de la seccional Rafaela, quien además, afirmó que a los productores «habitualmente los ignoran los gobiernos». Además, reconoció la labor de los empresarios de las firmas locales y aseguró que están «esperanzados» con la negociación entre SanCor y Adecoagro.

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