From Bloomberg:

High milk prices are “the new normal” and increased global commodity demand, led by emerging markets, is set to boost them further, according to Fonterra Cooperative Group Ltd., the world’s largest dairy exporter.

Whole-milk powder prices will likely remain at least 50 percent above their historical averages in the longer term, Chief Executive Officer Andrew Ferrier said in an interview today from Auckland.

Ferrier’s forecast adds to signs of quickening global food inflation as rising incomes in emerging markets such as China spur greater consumption of dairy and meat products. Food prices climbed to a record last month, according a 55-item basket tracked by the United Nations. That’s squeezing the poorest, World Bank President Robert Zoellick has warned.

“The price can probably move up from today’s price a way before we start burning off demand,” said Ferrier. “Higher prices are the new normal.” Fonterra accounts for about 40 percent of the global trade in butter, milk powder and cheese.

Rising Milk Prices Are ‘New Normal,’ Fonterra Says