Dairy product prices rise 2.4% in first auction since DCD scare

 Prices of dairy products rose in Fonterra's latest GlobalDairyTrade auction, the first since news emerged last month that small traces of a nitrate inhibitor had been found in some of the company's milk powder.

The GDT-TWI Price Index rose 2.4 percent compared to the last sale two weeks ago, the fourth straight gain. The average winning price rose to $US3598 a metric tonne. Whole milk powder, the biggest product by volume, rose 5.4 percent to US$3,468 a tonne.

Fonterra last week posted a statement on the GDT website assuring customers that none of the New Zealand dairy products on offer at this auction had been manufactured during periods when DCD was detected.

Ballance Agri-Nutrients and Ravensdown withdrew fertilisers containing DCD voluntarily after the substance was identified.

The total volume of dairy products sold at the latest auction was 38,232 tonnes, down from 40,418 tonnes a fortnight ago.

The price of anhydrous milk fat gained 7.2 percent to US$3500 a tonne and butter milk powder rose 3.7 percent to US$3530 a tonne. Cheddar slipped 0.1 percent to US$3525 a tonne.

Lactose traded at US$1800 a tonne and milk protein concentrate rose 1.2 percent to US$6070 a tonne. Rennet casein was up 3.3 percent to US$8766 a tonne and skim milk powder climbed 0.5 percent to US$3554 a tonne.

There were 135 winning bidders over 13 rounds. There were 212 participating bidders out of a total number of qualified bidders of 762.

(BusinessDesk)

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1 Comment & Question

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What excellent news. Now the dairy farmers will be able to afford to meet their nitrate pollution targets, reduce their elevated, artificial stocking rates, spend money on researching how to use less fertiliser and increasing riparian margins.

And how about using some of that filthy lucre to set up on-farm bio-gas plants to reduce the methane they pump into the atmosphere. If they get really clever they could even use some of that nasty greenhouse gas to generate electricity for the shed. Sustainable dairying here we come!

“It is utter arrogance for a sector which is already reaping significant environmental subsidies to use this as an excuse for affected farmers to maintain their artificially elevated stocking rates and further pollute the public’s freshwater resources.

“An environmentally and socially responsible industry would employ alternative measures to compensate, not say ‘Oh well, it’s back to business as usual boys’.”

The withdrawn products were seen as a means of helping reduce dairying’s impact on water by reducing the amount of diffuse nitrogen pollution leaching off farms and into waterways. Mr Johnson says in their absence regional councils must not lower pollution targets and instead should put the onus on the farmers to stick to environmental targets and reduce their impact by other means.

“If that requires a reduction in production, then so be it."

Lesser options that could assist include using less fertiliser and using it more efficiently, upgrading irrigation systems and increasing riparian margins adjacent to flowing waters, says Mr Johnson.

“The individual farmers affected by this should meet the costs associated with ensuring that they aren’t polluting the public’s resource.

“That’s what would be required of any other business – the dairy sector should not be treated as a special case and demands for yet more environmental subsidies should be flatly rejected by regional councils and the government.”

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