Fonterra slashes forecast milk price, again
Fonterra has slashed another 50c off its milk price forecast as global milk flows shows no sign of easing.
The co-operative plans to start discussions with farmer shareholders "about what a target will look like and how we'll get there".
Chief executive Miles Hurrell says having a target will help secure high value customers, enable the co-op and farmer owners to meet ongoing regulations as well as secure future finance.
Hurrell says there is "a strong pull" coming from customers, consumers and the capital market.
"Our access to the capital will be linked to how we are dealing with emissions on farm," he says.
Fonterra acknowledges making change on-farm is not easy.
Hurrell points out that the co-op currently has 18 methane-reduction projects underway and 30 active trials of potential solutions.
"These activities support us in building a stronger co-op for the future, and we'll be out talking about these topics over the coming months.
"As we've said earlier, we're well positioned to navigate the challenges we're currently seeing, while also looking out to the needs of our customers and consumers in the years ahead.
"This long-term view determines the steps we need to take today to ensure we continue to be a dairy provider of choice and strong co-op for generations to come."
The co-op is also investing in R&D and new technologies to help reduce emissions on-farm.
Projects underway include a new private-public partnership joint venture announced in November, through which Government and partners from across the food and fibre sectors will work together to reduce methane emissions.
Hurrell says the co-op is also making progress in work to transition its manufacturing sites out of coal by 2037.
"At our Waitoa site we're converting one of our boilers to wood biomass.
"Scheduled to be operating later this year, the new boiler will reduce the site's annual emissions by 48,000 tonnes of CO2e, the equivalent of taking 20,000 cars off New Zealand's roads."
