By PHILIPPA STEVENSON agricultural editor
A Dairy Board deal to sell the bulk of American skim milk powder exports will make it the world's biggest player in a market worth $US2 billion ($4.6 billion).
The board's ingredients business, NZMP, yesterday said it had signed an export agreement with Dairy America, a marketing
company representing major US co-operatives.
NZMP managing director Chris Moller, the deputy chief executive of Global Dairy Company, said Dairy America accounted for around 70 per cent of total US skim milk powder exports. This year it expected to ship more than 100,000 tonnes.
"This is a development of real significance for our industry and is strongly indicative of the strategic direction Global Dairy Company will take."
Massey Professor of Agribusiness Bill Bailey said any chance to sell into the world dairy market, particularly using other people's assets, was a good deal.
However, it was unclear whether additional sales would flow from the board's involvement, and what impact they might have. "The market's pretty strong at the moment, and it will be tough to read signals for another six months or so."
Mr Moller said NZMP operated the world's most extensive dairy marketing network and was ideally placed to market the US exports.
Professor Bailey said it was possible for a disciplined marketer to sell what was essentially surplus product into a market without disrupting it so the board's involvement could be valuable.
Probably more important was the board's aggressive approach to getting allegiances in the US. That was "extraordinarily positive", he said.
NZMP's sales of non-New Zealand dairy products are expanding and will this year be worth around $1 billion.
One of GlobalCo's key strategies was to utilise its global marketing network to market milk produced in other countries. The US deal was a significant step in that direction, Mr Moller said.
New Zealand's skim milk powder sales in 1999/2000 were worth $509.5 million, with Malaysia, the largest market, worth $67.4 million.
Rabobank figures show that in 1999, New Zealand had a 19 per cent share of world skim milk sales of more than 800,000 tonnes, and the US 13 per cent.
NZMP will sell Dairy America's product on commission.
