Wednesday, 12 December 2018 08:41

Fonterra farmers to fix the price of their milk

Written by 
Robert Spurway. Robert Spurway.

Fonterra is giving farmers the option to fix the price of some of their milk.

The co-op is introducing a new tool called Fixed Milk Price. It joins a set of seven of Fonterra’s financial tools and aims to assist farmers with budgeting, planning, and managing on-farm profitability.  

Farm Source and global operations chief operating officer Robert Spurway says the co-op is committed to making a difference for Fonterra farmers and providing flexible options to help them share up, invest on farm, and manage financial exposure.

“This season reminds us of the volatility in the global marketplace and the impact it can have on the milk price. While the co-op manages this volatility as best it can when selling our products, we recognise that it’s farmers who feel the brunt of it.

“In addition to providing farmers with the opportunity to get more price certainty, the Fixed Milk Price will also provide the co-operative with certainty on the margins it can achieve on a portion of milk supplied. It’s a win-win,” says Spurway.

How it will work

- All Fonterra farmers will have the opportunity to participate on a monthly basis (excluding January and February)

- The Fixed Milk Price will be referenced to the NZX Milk Futures Market, minus a service fee of no more than 10c/kgMS initially

- Over the course of a season, farmers will be able to fix up to 50% of their estimated milk production per farm

- Fonterra will make at least 1 million kgMS available at every event and up to a total of 5% of New Zealand milk supply available in a given season

More like this

Cynical politics

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.

Why is butter so expensive in New Zealand? Fonterra explains

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.

Featured

Rural backlash over plan to cut police staffing

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.

DairyNZ thanks farm staff

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.

Editorial: Getting RMA settings right

OPINION: The Government has been seeking industry feedback on its proposed amendments to a range of Resource Management Act (RMA) national direction instruments.

National

Machinery & Products

Fliegl offers effluent solutions

Founded in Germany as recently as 1977, today, the Fliegl Group employs more than 1100 workers, offering an expansive range…

» Latest Print Issues Online

Milking It

Fatberg

OPINION: Sydney has a $12 million milk disposal problem.

Synlait snag

OPINION: Canterbury milk processor Synlait's recovery seems to have hit another snag.

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter