Bakers prefer butter, helping prices soar
Consumers around the world are willing to pay more for products containing dairy and this is driving demand for butter and cream, says Fonterra.
The Government has released a discussion document on options to amend the Dairy Industry Restructuring Act 2001 and associated Raw Milk Regulations.
Fonterra's group director, cooperative affairs, Miles Hurrell, says in particular the cooperative welcomes the proposal that it is no longer required to sell milk to large processors who predominantly export their products.
"We're also pleased to see the proposal that remaining processors are able to access less of our milk over coming years," he says.
"However we are surprised the Government has not taken the opportunity to make broader changes to the legislation.
"The requirement to accept all milk acts as a disincentive to Fonterra to invest in the right kind of assets and undermines the industry's ability to grow value add business and maximise returns to NZ farmers, as we are all committed to do."
The Government is proposing only that Fonterra no longer have to collect milk from new dairy conversions.
"This is a step in the right direction, but doesn't address the full issue of being required to take milk from all comers, even when it doesn't make commercial sense to do so," says Hurrell.
"We will be engaging with MPI and the Government on these important issues over the next few weeks."
