Investors unfazed by DCD milk find

TIM CRONSHAW
Last updated 05:00 26/01/2013

Relevant offers

Farming

Duck eggs hatch into growing business for Taranaki couple Fonterra to pay organic milk farmers at market rates Marauding pigs being released, says fed-up lamb farmer Marlborough lake dries out for first time since 2004 Bullriders fly in front of 1500 at Martinborough rodeo Pirie wins champion fleece for ninth time Thousands of litres of milk lost as tanker rolls Bovine viral diarrhoea could cost Southland $2.6m Receiver puts Marlborough dairy farms on market Domestic manufacturing sales increase but downturn in dairy prices could begin to bite

Investors in Fonterra Shareholders' Fund units have shown little reaction to the recall of a product reducing nitrates in water being found in milk powder.

The active ingredient in nitrification inhibitors owned by fertiliser co-operatives Ravensdown and Ballance is dicyandiamide (DCD), and traces of it were found in Fonterra powder by a government and industry working party.

Sales of the products branded eco-N and DCn were suspended on Thursday as a result of international food safety bodies adding DCD to a testing list last year. Until new international standards are set the products are off the shelves to prevent any risk of the dairy export industry's reputation being tarnished.

Authorities say there is no food safety risk to the compound, but the owners of the products are unable to guarantee its complete exclusion in milk.

Fonterra investors, many of them off the farm, seem mostly unbothered by the recall, with fund units trading yesterday down 8c from Thursday's closing transaction of $7.31. Unit prices went as far down as $7.21 yesterday morning, but nudged back up again to close at $7.23.

Hamilton Hindin Greene director Grant Williamson said there had not been too much of a reaction to the recall, with trading down just over 1 per cent.

"Normally when there is negative news we can get quite a bit of selling, but we haven't seen much reaction at all. It indicates no-one is overly concerned . . ."

The Christchurch sharebroking company has watched as unit prices have continued to rise since they were first offered two months ago.

Ad Feedback

- BusinessDay

Special offers
Opinion poll

Is it time for authorities to introduce tougher penalties for poaching?

Yes

No

Vote Result

Related story: Booby traps for poachers cost farmers

Featured Promotions

Sponsored Content

Agri e-editions

Digital editions

Read our rural publications online