Fonterra Whareroa sets cheese record, wins top award
Fonterra Whareroa wrapped up a successful season with a record-breaking cheese production volume and several gongs at the co-op's annual Best Site Cup awards.
Fonterra farmers have a message for their co-operative - they need to see consistently strong performance in both payout and returns from share ownership.
Fonterra Co-operative Council chair John Stevenson says that rising costs have had a real impact on farmers' bottom lines.
"We can see that with the latest DairyNZ breakeven milk price being above $8/kgMS," Stevenson told Rural News.
"Many farmers have reported to us that they have felt significant financial pressure over the last 24 months. Fonterra needs to execute on their revised strategy to ensure that our returns are well above our costs.
"Council will be keeping a keen eye on how Fonterra delivers on its six strategic devices."
Last week, Fonterra released a revised strategy, promising to deepen its focus on its high-performing Ingredients and Foodservice businesses to grow value for farmer shareholders and unit holders.
Revised targets are increasing average return on capital to 10-12%, up from 9-10%, a new dividend policy of 60-80% of earnings, up from 40-60%, while remaining committed to maintaining the maximum sustainable Farmgate Milk Price.
Chairman Peter McBride says the revised strategy creates a pathway to greater value creation, allowing the co-op to announce enhanced financial targets and policy settings.
"The co-op exists to provide stability and manage risk on farmers' behalf, while maximising the returns to farmers from their milk and the capital they have invested in Fonterra.
"Through implementation of our strategy, we can grow returns to our owners while continuing to invest in the co-op, maintaining the financial discipline and strong balance sheet we've worked hard to build over recent years."
Stevenson says early feedback from farmers indicates that they view the new targets positively.
He notes that delivery of these targets will see strong returns to Fonterra farmers alongside significant investment into growing the co-operative.
"Council views performance as the key to delivery of this strategy, and we will be monitoring and reporting on our view of how Fonterra execute against these targets."
Stevenson says a competitive milk price is critical for Fonterra to deliver on strategy, as there is strong competition for milk from all processors.
"A strong sustainable milk price is the most important number to our farmers, but business performance is very important as well.
"It is pleasing to see a focus in the strategy on Fonterra delivering the strongest farmer offering, including a stronger payout and improving farm cash flow."
Fonterra is also going ahead with plans to divest its consumer businesses in New Zealand, Australia and Sri Lanka.
The co-op says the process is ongoing and progressing well.
Newly elected Federated Farmers meat and wool group chair Richard Dawkins says he will continue the great work done his predecessor Toby Williams.
Hosted by ginger dynamo Te Radar, the Fieldays Innovation Award Winners Event put the spotlight on the agricultural industry's most promising ideas.
According to DairyNZ's latest Econ Tracker update, there has been a rise in the forecast breakeven milk price for the 2025/26 season.
Despite the rain and a liberal coating of mud, engines roared, and the 50th Fieldays Tractor Pull Competition drew crowds of spectators across the four days of the annual event.
Nationwide rural wellbeing programme, Farmstrong recently celebrated its tenth birthday at Fieldays with an event attended by ambassador Sam Whitelock, Farmers Mutual Group (FMG), Farmstrong partners, and government Ministers.
Six industry organisations, including DairyNZ and the Dairy Companies Association (DCANZ) have signed an agreement with the Ministry for Primary Industries (MPI) to prepare the country for a potential foot and mouth outbreak.
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