increase font size
Happy days: Fonterra shareholders council chairman James Barron.
After a challenging year, dairy farmers will go into the festive season buoyed by high farm gate milk prices.
Major milk processors Fonterra and Open Country Dairy are signalling a forecast payout of well over $7/kgMS for the season.
Last week, Fonterra lifted its forecast milk price by 25c to a range of $7 to $7.60/kgMS. OCD has announced a range of $7.30 to $7.60/kgMS for December and January. And for February to May next year the independent processor will pay suppliers $7 to $7.30/kgMS.
Whole milk powder (WMP) prices, a key driver of the milk price, have hit their highest level since December 2016, reflecting a global dairy market that is tipped slightly in favour of demand.
Fonterra shareholders council chairman James Barron says the lift in the forecast price will give farmers some confidence going into Christmas.
“The farm gate milk price is at a sweet spot,” he told Rural News.
OCD chief executive Steve Koekemoer told its suppliers that stronger pricing being received in market and the foreign exchange now starting to flow through have resulted in the further upside.
“All settlement periods have stepped up, with the biggest moves being the November and January periods.
“You will notice that all our forward periods are now in the $7 range as we gain more confidence in the supply/demand for the balance of the season.”
For Fonterra farmers, a positive first quarter result will also help boost confidence.
Barron says farmers are happy to see the co-op deliver under its new strategy of a triple bottom line: healthy people, healthy environment and healthy business.
However, he points out that challenges loom on the horizon: weaker Chinese economy, unrest in Hong Kong and Chile and the pressure on profit margins of value added products due to high milk prices.
Federated Farmers vice president Andrew Hoggard says it’s still early days, and the proof of Fonterra’s turnaround will be if they get a dividend again at the end of this financial year.
Hoggard says farmer shareholders will be happy to see the co-op move in the right direction.
“I mean, they weren’t happy when our co-op was moving in the wrong direction,” he told Rural News.
Fonterra announced a positive first quarter result, achieving a gross margin of $740 million, up from $646m last year.
Operating expenditure is down by $104m, and debt is reduced by $595m compared to same period last year.
Chief executive Miles Hurrell says the cooperative has made good progress moving to its new strategy and has had a strong first quarter.
Foreign Affairs Minister Winston Peters has joined the debate around the proposed sale of Fonterra’s consumer and related businesses, demanding answers from the co-operative around its milk supply deal with the buyer, Lactalis.
OPINION: Farmer shareholders of two of New Zealand's largest co-operatives have an important decision to make this month and what they decide could change the landscape of the dairy and meat sectors in New Zealand.
Farmers supplying milk to Taupo-based processor Miraka are getting a 2024-25 season base milk price of $10.16/kgMS.
OPINION: As CEO of the Dairy Board in the 1980s I was fortunate to work with a team of experienced and capable executives who made most of the brand investments that created the international consumer business Fonterra inherited. Soprole in Chile was the largest, but there were more than 20 countries where consumer marketing companies were established and Anchor and other brands were successfully launched.
Fonterra has delivered a fifth straight year of record organic milk price for farmer suppliers.
Like many manufacturers around the world, European agricultural machinery and tractor manufacturers are currently operating in a difficult market environment. But they are heading to the world’s largest agricultural machinery event in Hanover next month with a degree of cautious optimism.
Established in 2021, the John Deere Technician of the Year Awards champion the important contribution parts and service technicians make to the Australian and New Zealand agriculture, construction and forestry industries.
Beef + Lamb New Zealand (B+LNZ) is calling on farmers from all regions to take part in the final season of the Sheep Poo Study aiming to build a clearer picture of how facial eczema (FE) affects farms across New Zealand.
New Zealand is closer to eradicating bovine TB than ever before, but possums remain a threat, says Beef + Lamb New Zealand.
Foreign Affairs Minister Winston Peters has joined the debate around the proposed sale of Fonterra’s consumer and related businesses, demanding answers from the co-operative around its milk supply deal with the buyer, Lactalis.
The ACT Party says media reports that global dairy giant Nestle has withdrawn from the Dairy Methane Action Alliance shows why New Zealand needs to rethink its approach to climate.
OPINION: Ageing lefty Chris Trotter reckons that the decision to delay recognition of Palestinian statehood is more than just a fit…
OPINION: A mate of yours truly recently met someone at a BBQ who works at a big consulting firm who spent…
