Stay-home diners hit US dairy sales

By PHILIPPA STEVENSON

The September 11 terrorist acts in the United States have driven Americans away from cheese-laden fast food and left the country's dairy industry reeling.

In Auckland yesterday, Gary Hanman, chief executive of the giant, $15 billion Dairy Farmers of America cooperative, said security-conscious Americans were staying away from restaurants.

"The dairy industry in the US has changed since September 11 and we're not sure yet, or understand, the damage of that terrible act," he said.

Before the bombings, up to 40 per cent of meals, many of them heavy with cheese and milk, were eaten outside the home. Americans eat 4 million tonnes of cheese a year.

That was good news for dairy farmers, who were enjoying their best returns in a decade as the demand/supply balance tipped their way. Prices rose as consumption of dairy products rose by 1 per cent a year, but production from their cows fell by the same amount.

New Zealand stood to benefit as well. The Dairy Board, now Fonterra, has a three-year-old joint venture with Dairy Farmers of America, supplying hard, grating cheese.

Last year, the New Zealand and American companies made a second deal to manufacture and market cheese and dairy ingredients.

It stood to lift Fonterra's turnover in the US by $150 million to $1.3 billion.

But Mr Hanman told 850 delegates at the World Dairy Summit at Auckland's Aotea Centre that the terrorism had caused great uncertainty.

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