Medals galore for Fonterra cheeses
Fonterra cheeses are continuing their golden run at the annual New Zealand Cheese Awards.
Fonterra is dropping a target to achieve 30 billion litres of milk volume by 2025.
The announcement by chief executive Miles Hurrell marks a major departure from the V3 strategy implemented by former chief executive Theo Spierings.
In 2012, Spierings unveiled its V3 strategy involving “volume, value, and velocity” aimed at increasing milk production volumes to ensure Fonterra maintains its share of the growing dairy market, driving more value from its milk through higher-value products, and doing so at speed.
Hurrell told Fonterra’s annual general meeting last week that when he took over a few months ago, he promised to take stock of the business, get the basics right and ensure more realistic forecasting.
“We have dropped our volume-based ambition,” he told about 400 farmers at the AGM held at its Lichfield plant in South Waikato.
“Our ambition to achieve $35 billion in revenue from 30 billion LMEs (liquid milk equivalent) by 2025 created confusion because it places too much emphasis on volume.
“Our co-op is not about being big for the sake of it.
“We’re about creating value for our farmers, our unitholders and for NZ. That doesn’t change.”
Hurrell also spoke of the need to maximise the NZ milk pool and not creating volume through farm developments around the world.
“When we shifted to talking about off-shore milk pools, we also created confusion.
“The concept of global milk pools can sound like we are creating volume through farm developments around the world.
“This is not what we are doing; I think it is important to clarify this.”
Hurrell says Fonterra’s approach has always been to generate global demand for its full suite of NZ-made products.
Hurrell says Fonterra has long-standing relationships with farmers in Australia and Chile.
“These allow us to make products locally, meet demand in overseas markets and take advantage of any lower tariffs that may exist. “This continues to be the right approach.”
Fonterra’s China farms recorded a direct loss of $9m last year.
Analysis by Dunedin-based Techion New Zealand shows the cost of undetected drench resistance in sheep has exploded to an estimated $98 million a year.
Shipping disruption caused by Houthi rebels in the Red Sea has so far not impacted fertiliser prices or supply on farm.
The opportunity to spend more time on farm while providing a dedicated service for shareholders attracted new environmental manager Ben Howden to work for Waimakariri Irrigation Limited (WIL).
Federated Farmers claims that the Otago Regional Council is charging ahead unnecessarily with piling more regulation on rural communities.
Dairy sheep and goat farmers are being told to reduce milk supply as processors face a slump in global demand for their products.
OPINION: We have good friends from way back who had lived in one of our major cities for many years.