Fonterra wants other large dairy companies to join its website auction for milk powder reports The Manawatu Standard. The co-operative is now selling about 20 per cent of the milk powder it produces on globalDairyTrade, but it wants to expand the web-selling mechanism. The trade manager of globalDairyTrade, Paul Grave, said web sales were a tool to manage global uncertainty over dairy prices.

“In forward sales, someone wins and someone loses. If a customer loses, they are not happy and Fonterra doesn’t want an unhappy customer. If Fonterra loses, our shareholders aren’t happy.” The price of milk powder used to change by a few hundred United States dollars a month, but now it can be US$600, Mr Grave said. “We can’t live with those fluctuations.”

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Fonterra says whole milkpowder prices today fell for a fifth time in its internet auctions, taking them to their lowest in more than two years reported The NZ Herald.

Fonterra’s trading manager, CRA International, said the average price across all products and contract periods for whole milkpowder (WMP) was $US2223/tonne, 14% lower than for the previous auction in November. Prices ranged from $US2045 a tonne to $US2455 a tonne, with milkpowder for February delivery down 15 per cent to an average US$2078 ($NZ4000) a tonne.

 ”The current economic crisis has resulted in a significant drop in the demand for dairy commodities, and a continued decline in prices was expected,” said Guy Roper, Fonterra’s commercial director of GlobalTrade. Fonterra said that over the past two years, the US Department of Agriculture had reported a 45% decline in EU Skim Milk Powder prices.