increase font size
Tatua chair Steve Allen (left) and John Powell
EVERY SEPTEMBER the 87 shareholders of Waikato dairy processor Tatua receive a call from one of their six farmer-elected directors.
The phone calls, made after a board meeting, relay the final milk price for the financial year just ended.
This year’s call was special: the co-op, celebrating its 100th birthday, announced a record 2013-14 payout before retention of $10.32/kgMS. Tatua suppliers will get $9/kgMS for milk supplied last season; the company retains $1.32/kgMS.
Tatua chairman Stephen Allen says shareholders were “incredibly appreciative” of the result.
“We ring our farmers after the final board meeting for the season and give them the results before anyone publicly knew,” Allen told Rural News. “The six farmer directors get on the phones; we’ve always done this.”
Allen says Tatua farmers were “100% supportive” of the decision to retain $1.32/kgMS, most of which will fund a $65m specialised powders dryer under construction. The dryer will not process milk but produce specialised ingredients for global infant formula manufacturers.
The record payout puts Tatua at the head of the 2013-14 payout stakes, ahead of other New Zealand processors including Fonterra.
Allen says the co-op was prepared for “a more difficult year” than eventuated; at the start of the season it had budgeted a payout around $7.00/kgMS.
“Every year what we forecast and what actually happens are two different things. It’s hard to predict and the start of the year can be a very different world from the end of the year.”
Last season was an exceptional year for all Tatua business units. Unlike most other New Zealand dairy processors Tatua doesn’t produce milk powders, infant formula or UHT milk. Instead, it is a world-renowned supplier of quality specialised ingredients and foods. Tatua’s key markets include Japan, US, China and Australia.
Its specialised added value (SAV) businesses produce a diverse range of products including hydrolysates, lactoferrin, mascarpone, crème fraiche, aerosol cream, natural dairy flavour ingredients and bionutrients.
Allen says every part of the business had a good year. “Our hedging policies also worked well to protect us from the high exchange rate.”
Commenting on the current season, Allen says the market remains soft for all dairy products.
Tatua has budgeted an opening forecast payout of $6-$6.50/kgMS for its suppliers this season. This month the board will review results for the first three months of the year.
Allen says it’s still early days and Tatua is asking farmers to budget on the “conservative end” of the forecast. “We are determined to stay above $6,” he says.
Milk supply for the season remains slightly higher than last season, thanks to a mild winter and a good spring. Tatua expects to process 18 million kgMS this season, compared to 17 million kgMS last season.
No more DIRA milk
TATUA HAS stopped receiving milk from Fonterra farms under the DIRA raw milk regulations.
Chairman Steve Allen says the co-op expects a modest lift in supply from its suppliers; it also has a trading arrangement with other independent processors.
Allen says Tatua took “a reduced amount” from Fonterra last season. “We haven’t taken any milk this year,” he says.
But milk growth is not high on Tatua’s agenda. Allen says while
over time its suppliers will expand, it is not looking to grow milk supply rapidly.
Not taking DIRA milk from Fonterra will not impact the co-op, he says.
“It’s fair to say for both our farmers and Fonterra farmers it’s been an uneasy arrangement – more of a perception thing. It has passed its use-by date and we’re comfortable it’s not there.”
Buoyed by strong forecasts for milk prices and a renewed demand for dairy assets, the South Island rural real estate market has begun the year with positive momentum, according to Colliers.
Fonterra farmers are pleased with their co-operative's interim results, says Co-operative Council chair John Stevenson.
Farmgate milk price could stay above $10/kgMS for two consecutive seasons, however, Fonterra is cautioning farmer shareholders to be wary.
Fonterra has reaffirmed a forecast milk price mid-point of $10/kgMS for its farmer shareholders, with just over two months of the 2024-25 season left to run.
With a record $10-plus/kgMS milk price almost locked in for this season, next season isn’t looking too shabby either.
A long-acting, controlled- release capsule designed to protect ewes from internal parasites during the lambing period is back on the market following a comprehensive reassessment.
Healthcare appears to be the big winner in this year's budget as agriculture and environment miss out.
OPINION: Foreign policy is a real strength of Winston Peter and this is recognised by Ministry for Foreign Affairs and Trade (MFAT) officials who, so the story goes, wanted him in his present role because of his experience in that field.
DairyNZ subsidiary New Zealand Animal Evaluation (NZAEL) will update the genetic base used to calculate Breeding Worth (BW) next month.
Ruralco has donated $10,000 to the Mid Canterbury Rural Support Trust following a recent fundraising golf tournament.
Nominations are open for three positions on the Horticulture New Zealand (HortNZ) board.
OPINION: Imagine if the Hound had called the Minister of Finance the 'c-word' and accused her of "girl math".
OPINION: It's good news that Finance Minister Nicola Willis has slashed $1.1 billion from new spending, citing "a seismic global…
