- news, features, articles and disease information for the dairy industry

Dairy Australia - Market News

05 April 2013

Dairy Australia - Fortnightly Update 5 April 2013Dairy Australia - Fortnightly Update 5 April 2013

Fonterra lifts NZ milk price forecast by 30 cents, UK High Court issues an injunction preventing Chobani from using the term "Greek yogurt" and Murray Goulburn confirms upgrading its UHT plant at Leongatha.
Dairy Australia - Market News

Global Developments

GlobalDairyTrade event 89 this week saw another round of price increases across a broad range of products push the Trade-Weighted Index (TWI) up a further 14.2%. Most dramatic was the 27.8% increase in average SMP prices to US$5,142/t – with NZ medium heat product for June delivery topping out at US$6,310/t. US and European equivalent SMP also attracted significantly firmer pricing, but in the US$3,900-4,000/t range. WMP prices continued to increase – with contracts through to August delivery driving the bulk of the average 7.0% gain (to US$5,100/t). Butter prices actually fell 2.7% to US$4,622/t while AMF climbed 6.7% to US$4,695/t. Full results at

Fonterra has lifted its NZ 2012/13 milk price forecast by 30 cents to NZ$5.80/kg MS (AUD) – which for a fully shared-up farmer would imply a total cash payout of NZ$6.12/kg MS (AUD). The increase was announced as the cooperative unveiled first half results including a 33% increase in net profit after tax to NZ$459 million (AUD). Strong results from Asian and Latin American brands, together with a solid performance by the NZ Milk Products division helped offset a 32% slump in Australia/New Zealand division’s EBIT. CEO Theo Spierings warned that the strong overall performance was unlikely to be repeated over the second half, with drought in NZ and increasingly challenging trading conditions in Australian and Asian markets.

The UK High Court has issued an injunction that prevents US yogurt manufacturer, Chobani, from using the term ‘Greek yogurt’, unless it is produced in Greece. The Court heard evidence that 25 years of labelling convention used by manufactures had created a perception in the mind of consumers in the UK that ‘Greek yogurt’ was produced in Greece. Subsequently, the use by Chobani of ‘Greek yogurt’, coupled with insufficient labelling with regard to its real place of manufacture – the United States of America – was seen by the court as being a misrepresentation of the product. The Court also heard that use of ‘Greek style yogurt’ was linked to lower priced product, perceived as being inferior. Use of this term was not referred to in the ruling.

The Australian Front

Bega Cheese announced a loyalty payment of 8c/kg butterfat and 20c/kg protein in addition to a step-up for ‘southern suppliers’ of 8c/kg butterfat and 20c/kg protein, taking the Bega Cheese/Tatura Milk Industries ‘average total price’ to approximately $5/kg milk solids.

Murray Goulburn (MG) confirmed that it is upgrading its UHT plant at Leongatha: the $19.1 m investment is expected to lift MG’s UHT annual output by 70 m litres. Woolworths (WOW) officially launched the ‘Farmers’ Own’ brand at Sydney’s Royal Easter Show. Also involving new entrant ‘Milk2Market,’ WOW’s move sees the supermarket major enter into direct supply agreements with a farmer group from Manning Valley (mid-North Coast NSW), pending expected approval by the Australian Competition and Consumer Commission (ACCC). The initial trial of un-homogenised ‘Farmers’ Own’ will involve Parmalat processing up to 15 m litres of the group’s milk per year.

WCB has signed a long-term agreement with Kraft Foods Australia under which Kraft Foods will manufacture up to 5,000 tonnes of cream cheese annually to be marketed under WCB’s Sungold label in Asian and Middle Eastern markets.

Fonterra announced its half-year financial results: the Aus–NZ business unit’s revenue was down 10%; earnings from the Australian consumer business down 31%. Fonterra signalled it is reducing the number of its brands in Australia, from 21 down to 4 or 5.

Lion is offering bonus payments to incentivise milk production by its WA suppliers: 5c per litre on increased production (for year-on year increases over February to July). Also, Lion has purchased the 1,145ha Horizon Glen dairy farm properties on King Island, ‘underpinning milk supply to meet current and projected volume requirements.’

April 2013

DOWNLOAD REPORT:- Download this report here


Seasonal Picks

Managing Pig Health: A Reference for the Farm - 2nd Edition