The world trade market continues to show its volatility with Fonterra's latest WMP auction results in its globaldairytrade auction last night. These results coupled with the recent strenghtening of the currency, should warn dairy farmers not to bank that last months dairy cheque increase just yet. Henry van der Hayden warned suppliers that the final result and next years payout will be heavily influenced by the currency. The continuing articles that warn that some dairy operators have debt levels that are unsustainable and rising costs of some operators are further signs that the next few years will be difficult for some. The average price for all products was $2144 US$ which is a 4.1% negative change from the previous event ( at levels last seen from 2004-2006). If we factor in the NZ exchange rate increase this downwood price drop ballons to a 9.7 % drop. Whilst many felt the market had bottomed this result shows that the market may not be ready to lift just yet, especially with international stockpiles to be sold.
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