Thursday, 27 February 2020 09:25

Fonterra keeps payout forecast despite coronavirus woes

Written by  Staff Reporters
Fonterra chief executive Miles Hurrell. Fonterra chief executive Miles Hurrell.

Fonterra is sticking to its forecast farmgate milk price range at $7-$7.60/kgMS despite the global uncertainty around coronavirus.

The co-op is also maintaining its forecast full-year underlying earnings guidance of 15-25 cents/share.

But the co-op has revised its forecast milk collections for the 2020 season: down from 1,530 million kgMS to 1,515 million kgMS due to poor weather conditions.

Fonterra chief executive Miles Hurrell says the co-op remains confident despite current market conditions as a result of coronavirus. 

“The momentum we saw in the first three months of the financial year has continued, and as we approach the interim results our underlying earnings are tracking well. However, given the potential significant risks that could arise from coronavirus in the second half, we are taking a prudent approach and maintaining our full-year forecast earnings range.  

“The current situation is very fluid and uncertain. However, we have already contracted a high percentage of our 2020 financial year’s milk supply and this is helping us manage the impact of coronavirus. 

“Our Greater China team are working hard to keep our operations running as smoothly as possible. Without them this would not have been possible and I want to thank them for their efforts. 

“There has been a slow-down in processing of containers at ports and we are managing the flow of our product into China carefully to avoid congestion. Currently, our product is continuing to be cleared by customs and quarantine officials. 

“In China, people continue to face movement restrictions due to the outbreak. This means many restaurants and food outlets are closed, which is having a major impact on the operations of our Foodservice customers. Our sales teams are working with these customers to help them where they can. 

“We will provide a further update on the impact of coronavirus on our business when we announce our interim result on 18 March.”   

Commenting on the co-op’s milk collections forecast, Hurrell says they are due to be down because of the weather conditions across several parts of New Zealand.

“We have recently seen a reduction in milk collections and our farmers are facing ongoing challenging weather. We’ll continue to work with them to ensure that if they need extra support that they are able to access it.”

More like this

Editorial: NZ's great China move

OPINION: The New Zealand red meat sector, with support from the Government, has upped the ante to retain and expand its niche in the valuable Chinese market - and the signs are looking positive.

Fonterra trims board size

Fonterra’s board has been reduced to nine - comprising six farmer-elected and three appointed directors.

Featured

Massey Research Field Day attracts huge interest

More than 200 people turned out on Thursday, November 21 to see what progress has been made on one of NZ's biggest and most comprehensive agriculture research programmes on regenerative agriculture.

Expo set to wow again

Stellar speakers, top-notch trade sites, innovation, technology and connections are all on offer at the 2025 East Coast Farming Expo being once again hosted in Wairoa in February.

A year of global challenges

As a guest of the Italian Trade Association, Rural News Group Machinery Editor Mark Daniel took the opportunity to make an early November dash to Bologna to the 46th EIMA exhibition.

Boost for hort exports

The horticulture sector is a big winner from recent free trade deals sealed with the Gulf states, says Associate Agriculture Minister Nicola Grigg.

National

OSPRI's costly software upgrade

Animal disease management agency OSPRI has announced sweeping governance changes as it seeks to recover from the expensive failure of…

Machinery & Products

BA Pumps expand

Cambridge based BA Pumps & Sprayers, specialists in New Zealand-made spraying equipment, has acquired Tokoroa Engineering’s product range, including the…

Entries open for innovation award

Fieldays and its renowned Innovation Awards are celebrating their 57th year, marking a longstanding tradition in the agricultural calendar, with…

» Latest Print Issues Online

Milking It

Chinese strategy

OPINION: Fonterra may have sold its dairy farms in China but the appetite for collaboration with the country remains strong.

Not fair

OPINION: The Listener's latest piece on winter grazing among Southland dairy farmers leaves much to be desired.

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter