Global processes uncover Russian milk deficiency
Raw milk deficiency in Russia and increased prices for dairy products in the world suffocate Russian whole-milk producing sector.
World draught and expected decrease in New Zealand milk production spurred the world market. On April 16 the average winning price at GDT rose to a record $US4721 a tone.
“Fonterra have announced a forecast farmgate milk price for next season (2013/2014) of $NZ7.00 per kg/ms, this is good news for our cooperative farmer shareholders. The farmgate milk price is important to Fonterra shareholders as they receive no subsidies and this reflects the majority of their annual income, - commented Nigel Jones, General Manager Strategy, Fonterra. - In July we will announce a dividend range that will be combined with the milk price to form an overall payout forecast”.
As per this scheme price variation for end product marketed by Fonterra is expected to meet the dividend range. So the cooperative’s farmers are able to calculate the economic scheme of their enterprise on the basis of foreseeable purchase price and possible additional revenue.
“Fonterra’s farmgate milk price is set by the Fonterra Board based on transparent calculations and rules based on independent GDT prices. In arriving at price predictions for this forecast, the general consensus is that dairy commodity prices have peaked but will continue at or near current levels until the fourth quarter of 2013, with most external forecasts pointing to prices remaining relatively strong through 2014”, - continued Nigel Jones.
The global market situation does not allow compensating raw milk appreciation by means of cheap ingredients import. As per RussianDairy.com data, average raw milk price in Russia as of 28 May reached 18.03 rubles including VAT. High purchase price uncover commercial milk deficiency on the local market. As a result the biggest producers predict consumer price increase, commented Dairy Procurement Director of Group Companies Danone Jille Burlo on May 29.
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