Editorial: A game changer!
OPINION: Fonterra deserves a pat on the back for delivering another solid set of financial results.
Fonterra has dropped its forecast milk payout for this season by 35c to $6.40/kgMS.
Chairman John Wilson says the lower forecast milk price reflects a prudent approach to ongoing volatility in the global dairy market.
The Global Dairy Trade price for whole milk powder is a big influencer of the farmgate milk price and it has declined by almost 10% since 1 August 2017.
“While the result of the arbitration with Danone has impacted our earnings guidance for the season, it has no influence on our forecast Farmgate Milk Price,” says Wilson.
“What is driving this forecast is that despite demand for dairy remaining strong, particularly in China, other parts of Asia and Latin America, we are seeing strong production out of Europe and continued high levels of EU intervention stockpiles of skim milk powder.
“This downward pressure on global prices is being partly offset by the lower NZ-US dollar exchange rate,” says Wilson.
The drop will not affect the advance rate paid to farmers for milk.
“Our strong financial position, customer order book at this point in the year, and confidence in demand means that the Board is able to increase the payments made in January by 10 cents per kgMS and will hold the Advance Rate through to the payments in May,” says Wilson.
“In effect, our farmers will receive equal or higher payments for their milk over this period than were scheduled under the previous $6.75 milk price.
Fonterra has also updated its full season New Zealand milk collection forecast due to ongoing challenging weather conditions. The cooperative has reduced its forecast by 1% to 1,525 million kgMS – the same volume as last season.
Federated Farmers says it welcomes the announcement of extra Government support for farmers and growers in Southland and parts of Otago after the region was hit by severe wet weather.
ASB has become the first bank to forecast a milk price above $9/kgMS for this season.
The Meat Industry Association (MIA) and Beef + Lamb New Zealand (B+LNZ) say they welcome the announcement that the European Union’s Deforestation-free supply chains Regulation (EUDR) will be delayed by 12 months.
Waikato-based milk processor Tatua has announced a final 2023-24 season payout of $10.50/kgMS for its farmer shareholders, again topping the payout stakes among NZ milk processors.
Tucked away in a remote part of the central North Island, staff at a Pāmu (Landcorp) farm are working hard to solve one of the biggest challenges facing the dairy and beef sectors.
OPINION: Fonterra deserves a pat on the back for delivering another solid set of financial results.
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OPINION: As a country we should be celebrating Fonterra’s solid annual results announced last week.