Revamped Fonterra to be ‘more capital-efficient’
Fonterra chair Peter McBride says the divestment of Mainland Group is their last significant asset sale and signals the end of structural changes.
The co-operative last week announced a wide range forecast of $8 to $11/kgMS for the 2025-26 season, which kicked off June 1. However, Fonterra has settled for a forecast price above the midpoint of the forecast range.
Based on the $10/kgMS forecast, Fonterra farmers will get an advance rate of $7.50/kgMS for the first four months of the new season rising to $8.40/kgMS by May next year.
McIntyre told Rural News that the high advance rate would mean more money into farmers' pockets.
"This would improve cash flows; help farmers reduce bank debt and invest into farm machinery and maintenance," he says.
McIntyre says the record opening forecast milk price is also good news for the rural community.
"When dairy farmers do well, the benefits flow to the local communities and businesses."
Fonterra chief executive Miles Hurrell says they expect demand to continue for now but acknowledged the ongoing geopolitical uncertainty and the potential for a wider series of outcomes across the season.
Fonterra also reaffirmed a milk price of $10/kgMS for the season that's just ended.
