US remains important market - Fonterra
Fonterra says the US continues to be an important market for New Zealand dairy and the co-op.
Fonterra's profit announcement will be small consolation for dairy farmers facing an extended period of low milk returns.
So says Labour's Primary Industry spokesperson Damien O'Connor.
"The capital restructure of Fonterra which established Trading Among Farmers created an inevitable tension between the milk price and dividend payout," says O'Connor.
Outside investors have been demanding a better return on their unit investments, he says.
"While analysts and investors may praise the outcome, farmers are waking up to the long term consequences of the new structure in tight times.
"Most will still be entitled to the dividend stream from their co-operative shares but the pressure on many to sell the shares and keep their farm viable will lead to larger differentials over time in returns to suppliers of milk to Fonterra."
Increasing the value of the dividend is also unlikely to be of benefit to the nearly 4000 sharemilkers, who will also miss out on the payment, says O'Connor.
"Moving more product into value added income streams should be increasingly beneficial for the company but should not come at the expense of lower milk payments to supplying shareholders.
"Milk production for Fonterra was down 4% last year. There's concern that over time Fonterra will face a supply risk and struggle to fill the huge processing facilities it has built. If growth in milk production coincides with ongoing competitive foreign investment in farms and processing plants, the dairy industry will end up in an unprofitable meat industry conundrum."
O'Connor says the half year results may be hailed as a success by Fonterra but many dairy farmers will struggle to share the celebration.
Federated Farmers supports a review of the current genetic technology legislation but insists that a farmer’s right to either choose or reject it must be protected.
New Zealand’s top business leaders are urging the US Administration to review “unjustified and discriminatory tariffs” imposed on Kiwi exporters.
New tariffs imposed by President Donald Trump signal an uncertain future, but New Zealand farmers know how to adapt to changing conditions, says Auriga Martin, chief executive of Farm Focus.
A global trade war beckons, which is bad news for a small open economy like New Zealand, warns Mark Smith ASB senior economist.
Carterton's Awakare Farm has long stood as a place where family, tradition and innovation intersect.
Fonterra says the US continues to be an important market for New Zealand dairy and the co-op.
OPINION: Is it the beginning of the end for Greenpeace?
OPINION: The good times felt across the dairy sector weren't lost at last week's Beef + Lamb NZ annual meeting.