Something festive for Fonterra farmers? A hint of solace would be a start…

Fonterra’s  suppliers will be choking on their  Xmas  rations, as they  digest the  price  blows  the co-op  has delivered.  First,  the dairy giant has  revised down  its  forecast milk payout  range  for the season to $6-$6.30 from the  earlier  $6.25-$6.50, and, second,  it is clawing back  some of the $4.15/kg  advance payment  rate.

Farmers  in  January will be paid  $4/kg for the  milk they supplied in  December plus the  co-op  is  clawing  back  15c/kg for all the  milk  supplied   between  June and November.

It  is  not   surprising that farmers   with  costs of  production  running   at  or above  $6/kg  are  reported to  be  “shocked”  and  “angry”.   Even those  efficient  operators   who have  lower  operating costs  won’t be happy  with   Fonterra  saying it  “appreciates”  the budgeting impact  the updated $4 advance rate will have on farmers in  January.     Continue reading “Something festive for Fonterra farmers? A hint of solace would be a start…”

Fonterra is big but Mataura (nutritionally) aims to be world’s best

Earlier this week Point of Order  drew  attention to  the   contrasting fortunes of   key  components  within New Zealand’s  dairy  sector,  which  by any account is  a  mainstay of  the country’s  export industry.  In that instance  it  was the contrast  between  the  report  of rising revenue  and  profit  of  specialist  milk supplier  A2 Milk  and  the slide  in  Global Dairy Trade auction prices likely to lead to  another  downgrade in the  milk payout  for Fonterra   suppliers.

The  contrast was  heightened  later in the week, first  with  speculative reports that Fonterra is putting  up for  sale  the  iconic icecream company Tip Top  (which could yield $400m to  reduce debt)  as well  as  its South American  operations.

Then came news of the opening of  a  new $240m plant  near  Gore in Southland. Continue reading “Fonterra is big but Mataura (nutritionally) aims to be world’s best”