Fonterra cements position as the big cheese!
Fonterra has cemented its position as the country’s number one cheesemaker by picking up nine NZ Champion of Cheese trophies this year.
Fonterra has delivered a mixed result to shareholders this morning.
The co-op has lifted its 2018-19 milk forecast price to $6.30-$6.60/kgMS, up from $6.00-$6.30 range announced in December.
However, the co-op revised its forecast earnings down to 15-25 cents per share, from 25-35c/share.
Chairman John Monaghan says the improved milk price forecast reflects the increases in global milk prices over the last quarter.
“Since our last milk price update in December, global demand has strengthened,” he says.
This is driven predominantly by stronger demand from Asia, including Greater China. The European Union’s (EU) intervention stocks of Skim Milk Powder (SMP) have also now cleared for the season and, as a result, Fonterra expects demand for SMP to be strong.
“Global supply remains above last season’s levels, but growth has slowed due to challenging weather conditions in some of the world’s largest milk producing regions – in particular, Australia’s milk production is forecast to be down 5-7% on last season and the EU’s growth has slowed and is now forecast to be less than 1% up on last year.
“Here in New Zealand, due to hot, dry weather since the start of the year, we’ve revised our Co-op’s forecast milk collections down from 1,550 million kgMS to 1,530 million kgMS. This is up 2% on last year.
“We’ve seen the positive impact of this supply-demand picture on a couple of fronts – the number of bidders and, more importantly, prices for the reference products that make up our milk price have increased over the last six GDT events.
“We expect demand to remain stronger relative to supply for the rest of the season.”
The DIRA milk price and the advance rate paid to farmers have been set off a milk price of $6.45 per kgMS.
Fonterra is also advising its farmers and unit holders that it will not be paying an interim dividend. A decision on any full year dividend can only be made at the end of the financial year, and will depend on the co-op’s full year earnings and balance sheet position.
Monaghan says that, while the milk price is strong, the co-op’s earnings performance is not satisfactory and the co-op needs to deliver farmers and unit holders a respectable return on their investment.
The Board is making solid progress with a full review of the strategy which includes a review of the dividend policy, he says.
Fonterra has cemented its position as the country’s number one cheesemaker by picking up nine NZ Champion of Cheese trophies this year.
New Zealand dairy processors are welcoming the Government’s commitment to continuing to push for Canada to honour its trade commitments.
An educational programme, set up by Beef + Land New Zealand, to connect farmers virtually with primary and intermediate school students has reported the successful completion of its second year.
The Food and Agriculture Organisation of the United Nations (FAO) has welcomed a resolution adopted by the United Nations (UN) General Assembly to declare 2026 International Year of the Woman Farmer.
Waikato herd health veterinarian Katrina Roberts is the 2024 Fonterra Dairy Woman of the Year.
Horticulture NZ chief executive Nadine Tunley will step down in August.