increase font size
Fonterra has been notified that rating agency Standard and Poor's has downgraded the co-op's credit rating from A to A-.
Chief financial officer Lukas Paravicini says "Our underlying financial strength and credit quality remain strong. This is recognised by Standard and Poor's maintaining our rating in the 'A' category and reflects our fundamental strength and financial discipline.
"It is important to note that the revised rating will not have any impact on Fonterra's strategy or on farmer shareholder payout."
Paravicini says the co-op's current debt is at expected levels for this stage of the investment cycle.
"We carefully planned our investment strategy by first reducing our gearing over a number of years to enable us to make higher levels of investment in key strategic opportunities.
"These investments are making the co-operative stronger and positioning us well for the future. We have built additional manufacturing capacity in our home base of New Zealand which is improving returns by giving more product options during the peak production period and our planned investments in China are building our presence in our number one strategic market."
Paravicini says Fonterra is continuing its strong financial discipline, including capital investment management, setting a prudent advance rate payment to farmers for the current season, and applying its dividend policy to ensure an ongoing retention of a portion of earnings.
He says Fonterra are progressing well with their business transformation and this will further strengthen their financial position. "Global dairy prices are also recovering which is a positive development, particularly for our farmer shareholders."
Standard and Poor's noted that its new methodology for agricultural co-operatives introduced in March does not always adequately capture the significant financial flexibility, and hence strength, of the co-op.
"Given this, we are disappointed that Standard and Poor's has not reconfirmed its rating from April, especially when global dairy prices have significantly improved and we have continued our strong financial discipline."
In the past, much has been made of the concept of farm to fork, but an Australian expert in food science and marketing with experience in the dairy industry, Dr Angeline Achariya, says the reverse of this slogan is critical to win modern day consumers.
A four year trial has reaffirmed that mixing plantain into dairy pastures can help reduce nitrogen losses to freshwater while maintaining milk production and profitability, say researchers.
Fonterra has opened its upgraded Chengdu Application Centre, bringing New Zealand dairy expertise closer to customers in one of China's fastest-growing regions.
Tatua chair Stephen Allen says he leaves the co-op with a deep sense of gratitude for the people who have contributed to its success.
Federated Farmers president Colin Hurst and his family raised a glass of milk last week to toast the start of a new addition to their farming operation at Makihihi, south of Timaru.
OPINION: The time has come for the Government to back the organic sector.
Plan ahead and be patient. That’s the message to farmers and horticulturalists from the chairman of the NZ Agricultural Aviation Association, Kent Weir.
The industry is crying out for graduates with agricultural related degrees.
While GPS and guidance have become the norm and yield mapping and variable application continues to gain traction, most agricultural machinery manufacturers continue to expand their technology offerings, amalgamating the vast amounts of data being collected to streamline real-time and ongoing management decisions.
Supply chain problems, growing protectionism and a move to greater food security are some of the key challenges facing New Zealand exporters, according to our top trade negotiator, Vangelis Vitalis.
A spat within the ranks of the New Zealand Deer Farmers Association has resulted in the suspension of outspoken North Canterbury farmer Barry Cuttance.
OPINION: After hogging the media limelight for telling a NZ Chinese MP to "go back home", Winston Peters has decided…
OPINION: With fuel prices soaring, one would have expected most farmers to be reclaiming excise duty on petrol.
