Expert Says Fonterra Backing Current Strategy With New CEO Appointment
The appointment of Richard Allen as Fonterra's new chief executive signals execution, not strategy, according to agribusiness expert Dr Nic Lees.
Fonterra updated its farmgate milk price to $4.15/kgMS in January versus $4.40/kgMS last year, Wilson told the Northland Dairy Development Trust.
"So it's our second year of very low prices onfarm," he said.
"One thing not being talked about... and which we need to adapt to, is that we clearly have an economy which is being supported, which is good, and more diversity than the influence of dairy in the past."
Historically if global whole milk and skim milk powder prices dropped to current levels the NZ dollar would have dropped to the low fives; giving a 50-55c (versus $US) exchange rate.
Net migration, the Canterbury rebuild and a strong tourism sector were causing the NZ dollar to be valued.
"So we've got a dollar which is strong relative to where we would normally be at these sorts of global commodity prices," he said.
"All these factors are clearly making it very difficult on farm."
