Fonterra seeks strong farmer mandate for sale
Fonterra chair Peter McBride expects a strong mandate from farmers shareholders for the proposed sale of its consumer and related businesses to Lactalis for $3.8 billion.
THE END of milk quotas in Europe from 2015 will add another dimension to the global milk supply, says Fonterra chairman John Wilson.
Wilson told Dairy News there are differing views on whether milk supply out of Europe will increase once quotas are lifted.
Given that EU's milk consumption is relatively stagnant, he believes increased production from the bloc will end up in the global market to meet growing demand.
He says Fonterra's joint venture with Netherlands-based A-ware Food Group is an example of the co-op tapping into the changing EU dairy environment.
Fonterra and A-ware Food Group are developing a new cheese plant and dairy ingredients plant in Heerenveen in the north of the Netherlands. A-ware will operate a cheese plant and Fonterra will operate a dairy ingredients plant alongside it.
Cheese will be produced for A-ware's customers in Europe and the whey and lactose produced will be processed into premium nutrition dairy ingredients for Fonterra's global customer base. A-ware will be sourcing milk from Dutch farmers, who are expected to ramp up production when the milk quotas go. Wilson says this could add another billion litres of milk to Fonterra's global pool.
Wilson expects global growth in milk production to be 0.5% higher than a year ago.
Global dairy demand is forecast to grow by 120 billion L by 2021, 40 billion L of that in freely traded markets – largely the emerging markets. New Zealand is expected to see 2% or 3 billion L growth during the same period.
Wilson says this highlights the importance of Fonterra's strategy to support New Zealand milk by ensuring access to global milk pools so we can accommodate demand growth.
Current global demand for milk products is growing at just over 2% per annum. In China, demand is expected to grow 7% by 2020 – but milk supply will grow by only 4%.
China's dairy industry is changing rapidly, with evidence this year of consolidation at the farming and manufacturing levels of the supply chain, says Wilson.
Forecasts predict a modest recovery in global milk production, with some early signs evident.
Key Southern Hemisphere exporting countries Argentina, New Zealand, and Uruguay are seeing small growth. Australian milk production remains down on last season. In the USA, with lower grain prices, milk supply is tipped to increase.
- By Sudesh Kissun
Federated Farmers says the final report into banking competition is a significant step forward for rural New Zealand - and a vindication of the farming sector's concern.
Fonterra chair Peter McBride expects a strong mandate from farmers shareholders for the proposed sale of its consumer and related businesses to Lactalis for $3.8 billion.
Fonterra chief executive Miles Hurrell says the sale of the co-op’s consumer and associated businesses to Lactalis represents a great outcome for the co-op.
The world’s largest milk company Lactalis has won the bid for Fonterra’s global consumer and associated businesses.
Fonterra has increased its 2024/25 forecast Farmgate Milk Price from $10/kgMS to $10.15/kgMS.
It took a stint at university to remind Otago dairy farmer Megan Morrison that being stuck in a classroom was not for her.
OPINION: Milking It reckons if you're National, looking at recent polls, the dream scenario is that the elusive economic recovery…
OPINION: Sydney has a $12 million milk disposal problem.