Winston Peters calls Fonterra vote result 'utter madness'
New Zealand First leader and Foreign Affairs Minister Winston Peters has blasted Fonterra farmers shareholders for approving the sale of iconic brands to a French company.
Fonterra has scope to lift its payout from current guidance, but its losses on Beingmate will likely weigh on its earnings and dividend payments, says New Zealand brokerage firm OMF Financial.
With dairy prices strengthening, OMF says milk price models show scope for Fonterra to lift its milk prices by 25c/kgMS from its current guidance of $6.40/kgMS.
This is unaffected by the GDT price index easing by 0.5% at last week’s auction, the first decline of the year.
“We see scope for Fonterra to raise their payout by NZ$0.25/kgMS for 2017-18, which would provide a buffer against the co-op’s likely losses and write-down associated with its investment in Beingmate,” OMF says in its monthly dairy report.
“Recently, there have been growing concerns over Fonterra’s investment in Chinese infant formula producer Beingmate Baby & Child Food,” OMF says.
“Beingmate’s poor performance has a direct impact on Fonterra’s profitability: Fonterra’s share of Beingmate’s net loss was reported at $42 million in the full year 2017. We expect losses this year to weigh on Fonterra’s earnings and dividend payments.”
BNZ’s Doug Steel says the easing by 0.5% at last week’s GDT Event auction was close to expectations. “Prices remain 12.9% higher than at the start of the year and 3.5% up on a year ago. Wholemilk powder prices rose 0.3%, with an average price of US$3246/t.”
Steel says the result fits with the idea that the upward price influence from NZ’s adverse weather has run its course, although there may have been some reduction in demand due to the lunar new year. Only 152 bidders took part in this auction, the lowest number seen in the past year.
“The ongoing theme of large EU stockpiles of skim milk powder and elevated EU milk production continues to weigh on skim milk powder prices,” Steel said. “SMP prices fell 3%, with an average price of US$1,832/t.
“The level of current dairy product prices helps Fonterra’s $6.40 milk price forecast for the 2017-18 season look achieveable.
“There is upside [possibility] to our $6.30 view at current product price levels. Indeed, if current prices were to persist for the remainder of the season something above $6.40 looks possible. It all depends on where international prices track over the coming months and, critically, what effective exchange rate Fonterra has managed to achieve.”
Acclaimed fruit grower Dean Astill never imagined he would have achieved so much in the years since being named the first Young Horticulturist of the Year, 20 years ago.
The Ashburton-based Carrfields Group continues to show commitment to future growth and in the agricultural sector with its latest investment, the recently acquired 'Spring Farm' adjacent to State Highway 1, Winslow, just south of Ashburton.
New Zealand First leader and Foreign Affairs Minister Winston Peters has blasted Fonterra farmers shareholders for approving the sale of iconic brands to a French company.
A major feature of the Ashburton A&P Show, to be held on October 31 and November 1, will be the annual trans-Tasman Sheep Dog Trial test match, with the best heading dogs from both sides of the Tasman going head-to-head in two teams of four.
Fewer bobby calves are heading to the works this season, as more dairy farmers recognise the value of rearing calves for beef.
The key to a dairy system that generates high profit with a low emissions intensity is using low footprint feed, says Fonterra program manager on-farm excellence, Louise Cook.
OPINION: Microplastics are turning up just about everywhere in the global food supply, including in fish, cups of tea, and…
OPINION: At a time when dairy prices are at record highs, no one was expecting the world's second largest dairy…