Dairy price drop 'expected'

21:05, Jul 16 2014

The drop in dairy prices yesterday has not taken Marlborough dairy farmers by complete surprise.

Prices dropped in the fortnightly Global Dairy Trade yesterday with the price index slumping 8.9 per cent.

The fall of US$3309 (NZ$3774) a tonne comes after a weak start to the year on Fonterra's online trading platform, with prices down a third since January.

Kaikoura dairy farmer Terry Laugesen said he was not surprised to hear the price had come down and half expected it.

"It's never good news, especially not when it is a big drop, but we all knew it had to come down at some point," he said.

He could not comment on how it would affect farmers until they knew what the flow-on effect would be once the banks and Fonterra put out a payout forecast. Woodbourne dairy farmer Christina Jordan said she hadn't had much time to really look at the details, but she was not too surprised. She would wait to see if it would lead to rises in interest rates and payout changes.


The Marlborough Express