August 31, 2010

Dairy price slump may help farmers

The recent fall in dairy prices may be good news for farmers, as prices are now more reasonable and should stabilise, says Fonterra chief executive Andrew Ferrier.

"If we had stayed at those very high levels again that we were trading in May and June, I think we might have actually seen some demand reductions," the head of the world's biggest dairy exporter says.

"But the fact that we came off those highs quite quickly, I think, is actually quite constructive for demand in particular in Asia," he adds.

World milk prices have fallen by about 20% over the last two months, with some commodities hitting their lowest level this year.