increase font size
“A competitive milk price doesn’t just happen,” says Fonterra chairman John Monaghan.
Fonterra chairman John Monaghan says a lot of work goes into delivering a globally competitive milk price to farmers.
“A competitive milk price doesn’t just happen,” he told the Fonterra annual meeting in Lichfield yesterday.
He reminded the 400 shareholders at the meeting that last year’s farmgate milk price was $6.69/kgMS, third highest in a decade.
Sales outside the Global Dairy Trade (GDT) platform added 10c/kgMS to the payout last year; GDT sales account for 42% of milk price auction.
The combination of these sales and Fonterra’s ability to keep milk price costs below the rate of inflation, equates to an additional $750 million paid to farmers every year in higher milk prices, says Monaghan.
Monaghan pointed out that there had been a “structural change” in local milk prices since Fonterra was formed.
“We’ve gone from being paid about half as much as our global peers to the point now where we are consistently paid the same or thereabouts.
“It sounds arrogant to say it, but the fact is that simply never would have happened without a strong Fonterra.
“For a time this year, NZ farmers were paid the highest milk price in the world.”
A higher milk price poses a challenge to Fonterra’s ingredients and consumer and foodservice businesses; they were competing on price against US and European dairy giants that had lower input costs.
OPINION: There is zero chance that someone who joined Fonterra as a lobbyist, then served as a general manager of Fonterra's nutrient management programme, and sat on the board of Export NZ, a division of lobbyist group Business New Zealand, doesn't understand that local butter (and milk and cheese) prices are set by the international commodity price.
Kiwis love their butter, and that's great because New Zealand produces some of the best butter in the world. But when the price of butter goes up, it's tough for some, particularly when many other grocery staples have also gone up and the heat goes on co-operative Fonterra, the country's main butter maker. Here the co-op explains why butter prices are so high right now.
An A$2 billion bid for Fonterra's Oceania business would be great news, according to Forsyth Barr senior analyst, equities, Matt Montgomerie.
Global dairy prices have ended a two-month run of losses.
The world's largest dairy company may be in pole position to acquire Fonterra's Australian assets.
Fresh produce grower and exporter T&G Global has overturned last year’s dismal performance by reporting a half year net profit of $1.7 million.
One of New Zealand’s largest fertiliser plants could be forced to shut down for four months as uncertainty looms over gas supply.
Federated Farmers North Canterbury president Bex Green says two public meetings held this week should have made it loud and clear that rural families and businesses are concerned about proposed staffing changes at NZ Police.
The Environmental Protection Authority (EPA) is consulting on a proposal to ban weedkillers containing chlorthal-dimethyl (DCPA).
August 6 marks Farm Worker Appreciation Day, a moment to recognise the dedication and hard mahi of dairy farm workers across Aotearoa - and DairyNZ is taking the opportunity to celebrate the skilled teams working on its two research farms.
OPINION: The Government has been seeking industry feedback on its proposed amendments to a range of Resource Management Act (RMA) national direction instruments.
