Why Fonterra accepted defeat in the dairy aisle
OPINION: Fonterra's sale of its consumer dairy business to Lactalis is a clear sign of the co-operative’s failure to compete in the branded consumer market.
He told farmer shareholders that the total New Zealand milk supply is likely to decline or be flat at best.
McBride says Fonterra's supply depends on the actions it takes with the capital structure, performance, productivity and sustainability.
"If we do nothing, we are likely to see around a 12-20% decline by 2030 based on the milk supply scenarios we have modelled.
"Protecting a strong New Zealand farmer-owned co-operative of scale is in all our interests."
He notes that being a strong co-op ensures it pays the highest sustainable milk price. Fonterra's milk price sets the benchmark for prices Kiwi dairy farmers are paid for their milk.
"Based on our current operations, our farmgate milk price could be 6-13 cents lower by 2030 if we make no changes to our capital structure."
