New Zealand may soon have a new milk-pricing regime. The proposed Dairy Industry Restructuring Bill will “ensure a competitive and innovative dairy industry”, according to the NZ Primary Industries Minister David Carter. The bill will require greater transparency on Fonterra’s part about how they set their farmgate milk price as well as creating an annual milk price-monitoring regime. Mr Carter says this is important as Fonterra’s huge market share means that "the price it pays its farmers for milk at the farm gate effectively becomes the default price that all dairy processors must pay to attract supply from farmers”. The actual price setting will still be up to Fonterra.

Milk price bill goes to Parliament
APNZ, NZ Herald, 29 March 2012

Farmers sound warning on milk
Owen Hembry, NZ Herald, 29 March 2012

Carter says bill won't hamper dairy industry
Radion New Zealand, 28 March 2012

The Australian Dairy Farmers (ADF) restructuring plan will be voted on next month but it has already had a set back with South Australian Dairy Farmers Association (SADA) resigning from the board last Friday, several months after the dairy section of the West Australian Farmers Federation did the same. The proposed new constitution will reduce the board of directors from fifteen to five members. Restructure committee chairman Noel Cambell says that there is “significant need of reform” and that “ADF was not financially viable over the last two to three years”.  SADA president, David Basham, claims that because  South Australia is such a small producer they would be unlikely to have a representative on the board and hence have little say in how their money would be spent. In retort ADF president, Chris Griffin says the board is “about representing the industry at a national level, you shouldn't come there with a hat of your state”. The new constitution will come into effect from 1 May, if it is passed.

Shake-up for Dairy Australia 
Simone Smith, The Weekly Times, 28 March 2012

SA votes with it's feet and leaves dairy lobby group 
Laura Poole, ABC Rural, 28 March 2012

ADF plan puts SADA a 'at risk' 
Alistair Lawson, Stock Journal, 29 March 2012

Danone is set to invest $700 million in its Russian operations. The French food group estimates that the Russian market will grow and plans to increase their production capacity over five to seven years. President of Danone's Russian business, Filip Kegels, says that "We are seeing a lot of opportunities for further development as dairy products consumption is significantly lower in Russia than in western Europe," and Danone aims to reduce the gap. Russia now makes up 11 per cent of Danone's sales and has the potential to continue growing, despite a decline in last year's sales. 

Danone plans $700 mln Russian investment
Maria Kiselyova, Reuters, 26 March 2012

Every culture thinks about the advantages of drinking milk differently. In Japan...

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More milk is set to be made in Tasmania as Australia's largest dairy operation increases in size. The Van Diemen's Land Company's new farm has begun milking, but this is a mere AU$4 million drop in a AU$180 million investment in their Woolnorth property. Tasmania Premier, Lara Giddings, says that the company will grow milk production "from five to 15 million kg of milk solids per annum" and "create 30 new dairy farms and upwards of 120 new full time jobs". Fonterra, National Foods and Tasmanian Dairy Products are also investing in expanding their Tasmanian operations. 

Massive dairy expansion continues
Lara Giddings, MP, Premier, Tasmanian Government Media Releases, 20 March 2012

Monster dairy kicks off
Helen Kempton, The Hobart Mercury, 21 March 2012

Fonterra have just announced their half-year results with a net profit after tax of $346 million for the period, up 18 per cent from last half year. Fonterra says this was “driven primarily by growth and improved margins in the Standard & Premium Ingredients business”. Revinue also increased by 7 per cent to $10 billion mainly due to higher sales volumes (total sales rose by 51 per cent) and rising commodity prices. Fonterra has also confirmed their current forecasted end of season payout of $6.75 – $6.85, which is inclusive of any dividends.

Strong half year for Fonterra - $346 million half year profit
Fonterra Press Release, 29 March 2012

Market focus on Fonterra
Andrea Fox, Business Day, 27 March 2012

Milk production and dairy product processing are increasing worldwide and the UK is no exception. The latest figures from the Department of Enironment, Food and Rural Affairs (Defra) show that January liquid milk production was 607, 050 tonnes, 2.9 per cent higher than January 2011. While January butter production decreased by 0.7 per cent from the same period last year, cheese production was up 2.3 per cent. It is unclear whether the decision of processors like Tesco to reduce the farmgate milk price will affect the production trend for the year.

Latest UK dairy processing figures
Farming Life, 27 March 2012

Utilisation of milk by dairies in England and Wales
Defra, Milk Statistics, 15 March 2012

Profits have increased for several major Chinese dairy producers. Mengniu Dairy had a 28.4 per cent net profit increase to 1.59 billion yuan ($251.82 million) and a 23.5 per cent rise in revenue. Bright Dairy & Food co.’s profits grew by 22.4 per cent and Inner Mongolia Yili Industry Group co.’s income surged up by 132.8 per cent. The Chinese dairy industry has been wracked by scandals for several years, causing many Chinese consumers to opt for foreign imports instead of potentially tainted domestic products. Mengniu has responded by announceing plans to invest 3-4 billion yuan in its own farms in order to improve milk quality over the next five years.

Dairy producers report huge profits
Fang Yunyu, Global Times, 28 March 2012

China Mengniu sees stable profit margin this year
Reuters, 27 March 2012

Tesco have announced a drop in their farmgate milk price. Beginning April 1 the British retailer will pay Tesco aligned farmers 29.56 pence per litre, down 0.65 pence per litre from the current price of 30.21 pence per litre. Tesco says that feed costs have been falling and hence the lower milk price. The National Farmers Union board chairman Mansel Raymon said the predictions of declining feed costs would be “hard to believe” for most farmers. Dairy cooperative Milk Link has maintained their price of 28.5 pence per litre for April 1 and the average European milk price was 34.71 euro-cents per kg/28.9 pence per litre.

Tesco cuts milk price to farmers
Julia Glotz, The Grocer, 23 March 2012

Price cut for Tesco milk suppliers
Howard Walsh, Farmers Guardian, 22 March 2012

Milk price moves
Douglas MacSkimming, The Scottish Farmer, 19 March 2012

Fonterra are planning on resuscitating their Chinese venture after the 2008 melamine baby formula scandal. The New Zealand dairy giant currently buys milk from its members in New Zealand and then exports $2 billion worth of products to China. The new venture will allow them to produce their own milk China, using New Zealand bred cows, but avoiding consumer fears about Chinese produced milk. While initially starting off with the one farm in Hangu, Fonterra plans on extending this to four of five hubs of several farms. Fonterra's expansion forms part of the Chinese government's plan to increase annual milk production by 30 million tonnes to 90 million tonnes between now and 2030.

Fonterra's new dairy farms mark a fresh start in China
Lucy Hornby & Jane Lanhee Lee, Reuters, 22 March 2012

China dedicated to growing dairy
Peggy Coffeen, Agri-View, 22 March 2012