Thursday, February 3, 2011

Efficient Dairy Producing country

The price of a two-litre bottle of milk in Australia has been slashed to A$2 (NZ$2.58) just as Kiwi shoppers, who are paying up to $4.80, brace for another round of dairy price increases.

Any time dairy chiller prices rise, New Zealand dairy giant Fonterra, collector and controller of more than 90 per cent of the country's milk production and the world's biggest dairy exporter, blames the price it is getting for its products in international markets – if Fonterra and its farmers are doing well overseas, Kiwi shoppers pay more.

The retail price of milk in New Zealand is now over $9/gallon - that is NZ dollars. According to the Bureau of Labor Statistics (BLS) the average U.S. price per gallon in December 2010 was $3.318.

In NZ there are farms who provide milk for domestic consumption and they produce milk year round, at quite a premium over the milk used in products for export.

The export milk producers are seasonal. What I have yet to figure out is how can the dairy plants remain profitable while sitting idle during the season when cows are dry?

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