Extreme global weather will contribute to a rise in dairy prices in the first six months of 2013, according to Theo Spierings, Fonterra’s chief executive.
“There has been a persistent, serious drought in the United States. That has pushed up the price of grain, which in turn affects dairy production. There are also concerns about drought in the Ukraine and Russia. In South America, extreme wetness in parts of Brazil and Argentina could also depress wheat production,” said Spierings.
“Given current global conditions, our forecasting anticipates global dairy prices are likely to move higher in the first half of 2013,” he added.
Sir Henry van den Heyden, Fonterra’s chair said that prices on the firm’s GlobalDairyTrade (GDT) dairy commodities auction had increased by over 17% since August.
“While there was a drop at last week's GDT event, it has not changed our overall commodity price forecasts," said van den Heyden.
Fonterra has raised its payout forecast to farmers for 2012/13 by 25% to NZ$5.90-6.00 for a "fully shared-up farmer”.
