Forced risks in marketing of dairy products

Press, 10 March 1984, Page 29

Forced risks in marketing of dairy products

PA Wellington The Dairy Board has managed to sell most of its skim milk powder, but has had to take risks with some of the buyers.

In order to maintain its sales programme the Dairy Board was forced to accept some “country risks,” the board’s chairman, Mr J. T. Graham, told the New Zealand Co-operative Dairy Company ward conference in Hamilton.

“The parlous state of the economies in many countries is well known — particularly Latin America and the under-developed countries in general. These countries represent a big proportion of our markets so that the risk factor is doing business with places like Mexico, Peru, and the Philippines, has gone up considerably.

“We have no bad debts to date, so our track record is

great, but the risk we are taking is getting greater also.”

With a somewhat pessimistic outlook for milk powder in the next year or so, Mr Graham said the board was maintaining a strategy of staying as close to sold-up as possible.

“The policy has been successful and we will end this season with no milk powder surplus of consequence — maybe 10,000 tonnes of skim milk powder.”

He said maintaining a sold-up position was not without cost. The United States dollar had increased in value some 7 per cent since November,' 1983, and E.E.C. prices had been allowed to fall by an equivalent amount. This had meant that to meet international competition the board’s prices were reduced 7 per cent.