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 battle for milk supply in Waikato is heating up with Canterbury processor Synlait entering the region.
It will build a $280 million powder plant at Pokeno, north Waikato, and is now encouraging potential Waikato suppliers to register their interest to avoid missing out.
Synlait’s project means three new milk plants will be commissioned in Waikato over the next 24 months, all three plants seeking milk at Fonterra’s doorstep.
Open Country Dairy’s new plant is nearing completion. Its chief executive Steve Koekemoer told suppliers last month the Horotiu factory build is progressing very well and interest in milk supply has been strong.
Happy Valley Dairy has resource consent for a $230m infant formula plant in Otorohanga. Its founder and director Randolph van der Burgh says farmers around the factory will be offered milk supply contracts once construction starts.
“We expect some farmers to switch supply to us; others may want to stay with Fonterra… it’s entirely up to each farmer,” he says.
Waikato Federated Farmers president Andrew McGiven says the new plants prove the effectiveness of the Dairy Industry Restructuring Act (DIRA), which led to the formation of Fonterra.
“It is ensuring that farm gate competition for milk supply is alive and well,” he says.
McGiven agrees that Fonterra suppliers in Waikato will be targeted by the independent processors. “Obviously Fonterra will have to compete to meet this competition,” he says.
“Congratulations to Synlait for taking the risk in developing a factory away from their supplier base... but they have experience in doing that obviously.”
Pokeno, the location for Synlait’s second nutritional powder plant, already has an infant formula plant, owned by Yashili.
“Our forecast increase in customer demand for infant formula products means we need to add additional powder manufacturing capacity as soon as we can,” says Graeme Milne, Synlait chairman.
Chief executive John Penno says the commissioning date will be known once consents and approvals are obtained.
OPINION: Trade Minister Todd McClay and the trade negotiator in government have presented Kiwis with an amazing gift for 2026 - a long awaited and critical free trade deal with India.
Former Agriculture Minister Nathan Guy says he's excited about his new role as NZ's Special Agricultural Trade Envoy.
A pillar of New Zealand's horticultural industry, Dr Stuart Davis, was farewelled at a well-attended funeral service in Tuakau, South Auckland, on December 18.
A stable but uncertain year lies ahead for New Zealand primary products, says Ministry for Primary Industries (MPI) Director General, Ray Smith.
Additional tariffs introduced by the Chinese Government last month on beef imports should favour New Zealand farmers and exporters.
Dairy prices have jumped in the overnight Global Dairy Trade (GDT) auction, breaking a five-month negative streak.

OPINION: If the hand-wringing, cravat and bow-tie wearing commentariat of a left-leaning persuasion had any influence on global markets, we'd…
OPINION: With Winston Peters playing politics with the PM's Indian FTA, all eyes will be on Labour who have the…