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."
Research lending to the production of dairy products that benefit the elderly and improves the overall wellbeing of all people is a key focus of Fonterra's Research and Development centre, based in Palmerston North.
Milk processors are either matching or beating Fonterra's record $10/kgMS opening forecast milk price as the 2025-26 season gets underway.
Fonterra has announced a record forecast opening organic milk price of $12.30/kgMS for the new season.
Australian dairy farmers supplying Fonterra are getting an opening weighted average milk price of A$8.60/kgMS for the new season or around NZ$9.26/kgMS - NZ74c less than New Zealand suppliers, based on the current exchange rate.
A record $10/kgMS opening forecast milk price for the new season means more money into Fonterra farmers pockets early, says Federated Farmers dairy chair Richard McIntyre.
Dairy farmers are set to benefit from the radical sweeping changes the Government is planning to make to the regulations that form part of the Resource Management Act (RMA).
The reported surge in interest in dairy conversions should be put into the context of falling overall cow numbers and improving environmental performance, says DairyNZ.
New Zealand's top trade official has told dairy farmers that their sector faces the most trade barriers internationally.
Waikato sharemilker Matthew Zonderop had no inkling that one day he would become a matchmaker for cows.
The coveted post of Federated Farmers' national dairy chair will see a two-way contest at the Federated Farmers annual meeting later this month.
Research lending to the production of dairy products that benefit the elderly and improves the overall wellbeing of all people is a key focus of Fonterra's Research and Development centre, based in Palmerston North.
OPINION: The Free Speech Union is taking this one too far.
OPINION: New national data from The Drug Detection Agency (TDDA), a leading workplace drug tester, shows methamphetamine (meth) use is…
