January 14, 2009

Dairy co-operative Fonterra has announced it will reduce its milk price paid to Australian farmers by 32 percent between February and June.

The move reflects a 9-percent cut across the full season from the opening price, according to Fonterra's managing director in Australia, Bruce Donnison.

There is no immediately respite from the difficult trading conditions, which are dominated by a global credit crunch, worldwide recession and collapsing commodity prices, said Donnison.

Last month, Fonterra withdrew its November step-up payment for dairy products and warned of more severe cuts to come.

Dairy company Murray Goulburn had also slashed the base price of milk supplied from February by an average 26 percent.

In the UK, dairy companies such as Arla and First Milk had also reduced milk prices paid to farmrs.