(click on graph to enlarge)
Fonterra had their monthly internet auction of whole milk powder (WMP) today, July 1, 2009. And, probably to no one’s surprise, prices fell again - another three per cent.
The weighted average for all contracts was $0.8295 per pound in U.S. dollars. That is roughly the NASS price for NFDM with the cram thrown in for nothing. The fist such auction was held on July 1, 2008 and the weighted average was $1.9936. In other words the most recent sale value was 41.6% of the first.
Oceania is quick to blame the dairy export incentive program (DEIP) and the EU export subsidies. However, things were headed down hill long before the DEIP program was restarted.
Before the DEIP came along, however, many in dairy world trade were blaming the Fonterra, and their internet auction for the fall in powder price. As the graph, provided by Fonterra, above shows the fall started long before DEIP.
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