SA will benefit from high world dairy prices

The current increase in international dairy product prices will benefit the local industry, said Etienne Terre’Blanche, newly appointed managing director of the Milk Producers’ Organisation. Milk producers can anticipate that these trends will positively influence their own prices. According to Terre’Blanche, international dairy product prices have been in an upward swing since mid-2006.
The main reasons are a drop in European and Australian production, as well as the rapid expansion of developing markets for dairy products. The Australian export index has improved by 40% since May 2006. New Zealand dairy company Fonterra is expected to pay NZ$5/kg of solids to producers for the next season – the highest payment since 2001. Fonterra is also very optimistic about the future. In a recent press statement, the company indicated that the worldwide demand for dairy products could grow by 2,7% over the next decade, compared with the 2% growth in production. An annual increase in production equivalent to the New Zealand production must be maintained to keep up with the growth in demand. Local milk buyers are also experiencing a rapid growth in the consumption of dairy products – in some cases an increase in demand of up to 18%. The continuing increase in consumer spending and the growth in demand within the middle income group will result in further increases in demand. Terre’Blanche ensured producers that the MPO will continue to do everything in its power to negotiate the best possible dispensation for its producers. The organisation has already succeeded in practically eliminating illegal imports. – Staff reporter