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John Wilson.
Fonterra farmers will receive a final milk payout of $6.52/kgMS for last season.
The 2016-17 payout, for season ending May 31, includes a milk price of $6.12/kgMS and a dividend of 40 cents per share.
The co-op announced the final payout as part of its 2017 annual results.
Revenue increased by 12% to $19.2 billion, with rising prices offsetting a 3% decline in volumes at 22.9 billion liquid milk equivalent (LME). Normalised EBIT of $1.2 billion was down 15% as a result of reduced margins across the business which also influenced net profit after tax, down 11% at $745 million.
Fonterra chairman John Wilson said the cooperative’s ability to maintain its forecast dividend despite the milk price increasing by 57% over the year and the impact of negative stream returns was an excellent result.
“We will always need to manage variability across our cooperative – both in global markets and in our local farming conditions. We’ve demonstrated our ability to deal with those conditions and deliver on our strategy again this year,” says Wilson.
“Over recent seasons, our farmers have made significant personal sacrifices to reduce costs through a sustained low milk price period.
“As part of our continued business transformation, the cooperative has also made a fundamental shift in the way it operates, continuing the strong focus on increased efficiency and developing new revenue streams.
“Despite lower milk volumes due to poor weather in parts of the season, the business delivered a good result by prioritising higher value Advanced Ingredients and growing our sales of these in-demand and specialised products by 473 million LME this year.”
Fonterra’s consumer and foodservice business continues its strong performance. This year it sold more than 5.5 billion LMEs, an additional 576 million LME on last year. This volume growth across these two portfolios has delivered normalised EBIT of $614 million, an increase of 6% on last year.
“Today’s announcement will be welcome news for our farmers, who remain focused on carrying their on-farm efficiencies through to the new season to make the most of improved prices,” says Wilson.
OPINION: There is zero chance that someone who joined Fonterra as a lobbyist, then served as a general manager of Fonterra's nutrient management programme, and sat on the board of Export NZ, a division of lobbyist group Business New Zealand, doesn't understand that local butter (and milk and cheese) prices are set by the international commodity price.
Kiwis love their butter, and that's great because New Zealand produces some of the best butter in the world. But when the price of butter goes up, it's tough for some, particularly when many other grocery staples have also gone up and the heat goes on co-operative Fonterra, the country's main butter maker. Here the co-op explains why butter prices are so high right now.
An A$2 billion bid for Fonterra's Oceania business would be great news, according to Forsyth Barr senior analyst, equities, Matt Montgomerie.
The world's largest dairy company may be in pole position to acquire Fonterra's Australian assets.
Over 85% of Fonterra farmer suppliers will be eligible for customer funding up to $1,500 for solutions designed to drive on-farm efficiency gains and reduce emissions intensity.
Kiwis love their butter, and that's great because New Zealand produces some of the best butter in the world. But when the price of butter goes up, it's tough for some, particularly when many other grocery staples have also gone up and the heat goes on co-operative Fonterra, the country's main butter maker. Here the co-op explains why butter prices are so high right now.
DairyNZ chair Tracy Brown has waded into the debate around soaring butter prices, pointing out that the demand for dairy overseas dictates the price to farmers and at the supermarket.
Farmers are welcoming new Government proposals to make farm health and safety rules more practical and grounded in real-world farming.
Missing fresh mozzarella cheese made at home in Bari, southern Italy, Massimo Lubisco and his wife Marina decided to bring a taste of home to New Zealand.
An A$2 billion bid for Fonterra's Oceania business would be great news, according to Forsyth Barr senior analyst, equities, Matt Montgomerie.
Irish meat processor Dawn Meats is set to acquire a 70% stake in Alliance Group, according to a report in The Irish Times.
