Commodity hopes high but situation precarious.

colour_strip_2.jpg
Commodity hopes high but situation precarious.

Published on www.ecofarm.co.nz
Question: Is the demand growth for milk powder a product of actual consumer demand and is therefore sustainable or has the demand been created by manipulating supply in which case it's unsustainble?
 
Farmers Weekly May 10th 2010: Headline “Intervention threat looms from stocks held by Europe and U.S”.
As at April 2010 there were approximately 360,000 tons of skim milk powder being held in “intervention” stores in the U.S. and E.U.  Sir Henry neglected to mention this fact when announcing the 40 cent payout increase.  How different would the auction price be if the intervention stores were released?  What implications would that have on the payout?
 
It appears supply is being manipulated.  That would make the auction price a false market signal.  That makes the payout increase unsustainable.  Don’t rush back to your dairy conversions just yet!
 
About our company
Enter a succinct description of your company here
Contact Us
Enter your company contact details here