Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Fonterra lifts forecast for this season’s local milk supply

Fonterra lifts forecast for this season’s local milk supply

By Paul McBeth

March 7 (BusinessDesk) - Fonterra Cooperative Group, the world’s biggest dairy exporter, anticipates bigger growth in milk supply this season with dry conditions not as bad as last year’s drought, and the incentive of a higher forecast farmgate pay-out.

New Zealand milk volumes are forecast to rise 7.5 percent to 1.57 million kilograms of milk solids in the 2013/14 season, up from a previous expectation of 6.4 percent growth, Fonterra said in a statement. Based on the forecast payout to farmers of $8.65 per kgMS, that implies Fonterra will pay some $13.61 billion to source local milk in the season. Fonterra’s New Zealand-sourced milk costs were $8.64 billion in the year ended July 31, 2013, when it paid $5.84 per kgMS to farmers.

The Auckland-based company collected 151 million kgMS in February compared to 137 million kgMS a year earlier when the North Island was in the grip of the worst drought in seven decades. Total collection in the season to date was up 4.9 percent to 1.27 million kgMS.

“While we are seeing dry conditions impact some regions of the country, particularly Waikato and Northland, these are not as widespread as the same time last year,” Fonterra said. “The lift in Forecast Farmgate Milk Price may have a positive influence on milk supply increasing above our previous forecast.”

Fonterra’s board has kept the increase in the forecast payout 70 cents lower than what it would be using calculations from the regulated milk price manual, due to a production mismatch where the price of whole and skim milk powder surged ahead of higher margin products such as cheese and butter.

In December, Fonterra said it was limited by its plant configuration on how much milk powder it can produce, with about 70 percent of production capacity for milk powder and the remainder making cheese and casein.

Last week Fonterra said it would give an update on the business when it reports its first-half result on March 26. It has previously forecast 2014 earnings before interest and tax to fall to between $500 million to $600 million from normalised EBIT of $1 billion in 2013.

Units in the Fonterra Shareholders’ Fund, which gives investors exposure to the company’s dividend stream, gained 0.8 percent to $5.98, and have increased 2.2 percent this year.

(BusinessDesk)


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Half Empty: Fonterra's 2017 Opening Forecast Below Expectations

Fonterra Cooperative Group raised its forecast farmgate milk payout for next season by less than expected as the world's largest dairy exporter predicts lower prices will crimp production and supply will pick up. The New Zealand dollar fell. More>>

ALSO:

Pest Control: Mouse Blitz Team Leaves For Antipodes

The Million Dollar Mouse project to rid Antipodes Island of mice is underway with the departure of a rodent eradication team to the remote nature reserve and World Heritage Area. More>>

Gongs Got: Canon Media Awards & NZ Radio Awards Happen

Radio NZ: RNZ website The Wireless, which is co-funded by NZ On Air, was named best website, while Toby Manhire and Toby Morris won the best opinion general writing section for their weekly column on rnz.co.nz and Tess McClure won the best junior feature writer section. More>>

ALSO:

Pre-Budget: Debt Focus Risks Losing Opportunity To Stoke Economy

The Treasury is likely to upgrade its forecasts for economic growth in Budget 2016 next week but Finance Minister Bill English has already signalled that more of his focus is on debt repayment than on fiscal stimulus or tax cuts... More>>

ALSO:

Fulton Hogan's Heroes: Managing Director Nick Miller Resigns

Fulton Hogan managing director Nick Miller will leave the privately owned construction company after seven years in charge. The Dunedin-based company has kicked off a search for a replacement, and Miller will stay on at the helm until March next year, or until a successor has been appointed and a transition period completed. More>>

ALSO:

Gordon Campbell: On Electricity, Executions, And Bob Dylan

The Electricity Authority has unveiled the final version of its pricing plan for electricity transmission. This will change the way transmission prices (which comprise about 10% of the average power bill) are computed, and will add hundreds of dollars a year to power bills for many ordinary consumers. More>>

ALSO:

Half Empty: Fonterra NZ, Australia Milk Collection Drops In Season

Fonterra Cooperative Group says milk collection is down in New Zealand and Australia, its two largest markets, in the first 11 months of the season during a period of weak dairy prices. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news