Fonterra Announces 40 cent Payout Increase

Fonterra has just announced it is increasing its forecast milk price payout by 40 cents, to $6.10 per kilogram of milksolids.

 

Co-op chairman Sir Henry van der Heyden said continued strength in global dairy prices, with demand growth beginning to outstrip supply, had driven the decision to increase the forecast milk price.

 

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?