9 Aug 2013

Dairy auction shows no contamination fallout

10:40 am on 9 August 2013

A rumoured boycott of Fonterra's global dairy trade auction didn't happen but a dairy analyst says the industry is now wondering if Fonterra's botulism debacle will contaminate New Zealand's clean green marketing image.

At the GDT auction on Tuesday night prices fell by 2.4%, with an average selling price of $US4847 a tonne. However, there was also a lot more product for sale and prices remained at very high levels.

The auction came just days after Fonterra issued recalls of whey protein contaminated with botulism-causing bacteria.

A dairy market analyst for NZX AgriFax, Susan Kilsby, says industry concerns have eased and Tuesday's auction showed people still want New Zealand milk.

But dairy companies don't know yet what the long-term damage will be, she says - will it be lasting or can New Zealand's clean, green image be rebuilt and the premium prices associated with that image maintained?