Balance sheet still strong – Spierings

He also claims it has strong treasury policies on interest and foreign exchange risk. “So our position is very strong,” he says.

Hedging is managed through careful foreign exchange (FX) policy and everything is being run normally. “You will see that when the year-end results are released at the end of September; what our average exchange rate has been at the end of the year. And I think you will note at that time our treasury function performed very well in what has been a unique environment.

“We hedge in a very volatile environment, both for commodity prices and FX; and across financial markets and commodity markets generally we use a hedging policy to assist us to provide appropriate foresight in our forecasting for farmers and to manage the risk of volatility.” 

Asked if they had rented warehouse space to stockpile milk powder as in 2008, Spierings says on the contrary they had had “an extremely strong July month of shipments”. 

Spierings says the  $500-600m capital spending reduction in the 2015-16 season will come from phasing new building and phasing offshore investment in farming, notwithstanding the essential investments needed to keep farms going in NZ. 

He says they are in a strong position and there are no pressures on liquidity at the moment.