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NZ Dairy Farmers Dodge Bullet After Price Revival

29 December 2016

NEW ZEALAND - Up until August, dairy farmers were thinking the unthinkable - another year of milking cows at a loss.

Whole milk powder - the key product for New Zealand producers - had been trading at under US$3000 a tonne for more than 20 months.

A brief rebound in February 2015 to US$3072/tonne was followed a brutal decline to just US$1590/tonne in August that year.

Signs of life returned mid way through this year, but it was not until August that whole milk powder prices started to rally convincingly.

At the last auction for 2016, whole milk powder traded at US$3586/tonne - inside the comfort zone for most farmers - and almost double the price reached early in the year.

Last month, gains in the GlobalDairyTrade convinced Fonterra to raise its farmgate milk price by 75c tp $6.00 a kg - about $1/kg above the average break even point and well ahead of the $4.40/kg milk price for 2014/5 and $3.90/kg for 2015/6.

Source: NZHerald.co.nz

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