Bloomberg the Company & Products

Bloomberg Anywhere Login


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Fonterra’s Spierings Sees Dairy Prices Rising on Chinese Demand

Don't Miss Out —
Follow us on:

Aug. 28 (Bloomberg) -- Fonterra Cooperative Group Ltd., the world’s biggest dairy exporter, expects global milk prices to recover from their slump as China re-enters the market, Chief Executive Officer Theo Spierings said.

“We have factored in an expected recovery,” Spierings said in an interview yesterday after the Auckland-based company unexpectedly maintained its forecast payout to New Zealand farmers at NZ$6 a kilogram of milk solids for the current season. “I have no reason at this point in time to believe the milk price will sit significantly under the average of the last five years” of around NZ$6 to NZ$6.5 a kilogram, he said.

Fonterra cut its forecast in late July from an initial estimate of NZ$7, and Bank of New Zealand Ltd. economists expected a further reduction yesterday after a 44 percent plunge in whole milk powder prices since February. China, the biggest customer for New Zealand dairy products, has been buying less after building up inventories earlier in 2014.

Spierings said Russia’s ban on some dairy imports was a risk and could cause some market disruption. Russia has halted purchases of an array of food products including dairy items from the EU, U.S., Canada, Australia and Norway in retaliation for sanctions over its treatment of Ukraine.

Still, stocks in China were returning to more normal levels and “you can clearly see that there is still strong consumer growth,” Spierings said. “Short-term hiccups with inventories can cause fluctuations in price, but I get concerned when demand at a consumer level goes down.”

Whole milk powder prices rose for the first time in two months at the most recent GlobalDairyTrade auction Aug. 19.

China is “really coming back to the market,” Spierings said. “They went from levels below 20 percent to over 30 percent of the volume, and we had significant volume.”

To contact the reporter on this story: Matthew Brockett in Wellington at

To contact the editors responsible for this story: Matthew Brockett at Tracy Withers

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.