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

 


Fonterra says price gap between dairy products easing

Fonterra says price gap between milk powder vs casein and cheese is easing

May 12 (BusinessDesk) - Fonterra Cooperative Group, which posted a 53 percent drop in first-half profit as gains in prices of milk powder ran ahead of products such as casein and cheese, says the gap is becoming less pronounced – a sign that pressure on margins may ease.

Prices of reference commodity prices used to calculate the farmgate milk price– whole and skim milk powder, butter milk powder, butter and anhydrous milk fat – rose 44 percent to $5,981 a tonne in the third quarter while non-reference product prices, cheese and casein, rose 22 percent to $7,499 a tonne.

That’s a smaller gap than in the first quarter, when prices gained 62 percent and 22 percent respectively, the Auckland-based company said in its latest global dairy update.

Last November, Fonterra took a $157 million provision against inventory of specialised ingredients and branded consumer products produced by its NZ Milk Products division because rising input costs squeezed margins. In March this year, it posted a slump in first-half earnings as gross margin shrank to 12.5 percent from 18.6 percent.

The company has said it can’t process more milk into higher returning milk powder products until it builds more driers because of the mix of its factories, which can produce milk powder versus cheese and casein at a ratio of 75 percent to 25 percent.

The volume of sales of reference commodity prices shipped fell 2 percent in the third quarter as Fonterra took advantage of higher prices to ship more volume earlier in the year, while some was contracted for shipment in the fourth quarter. The volume of non-reference products shipped fell 13 percent.

Total production volume rose 21 percent in the third quarter, reflecting the impact of drought in the same quarter of 2013.

Milk collection across New Zealand for the 11 months ended April 30 rose 8 percent to 1,524 million kilograms of milk solids.

Units of the Fonterra Shareholders’ Fund were unchanged at $6.0.

(BusinessDesk)


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Price Of Cheese: Dairy Product Prices Fall To The Lowest This Year

Dairy product prices fell in the latest GlobalDairyTrade auction, hitting the lowest level in the 2015 auctions so far, as prices for milk powder and butter slid amid concern about the outlook for commodities. More>>

ALSO:

Houston, We Have An Air Route: Air New Zealand To Fly Direct To The Heart Of Texas

Air New Zealand will fly its completely refitted Boeing 777-200 aircraft between Auckland and Houston up to five times a week opening up the state of Texas as well as popular nearby tourist states such as Louisiana and Florida. More>>

ALSO:

Scoop Business: Reserve Bank’s Spencer Calls On Govt To Rethink Housing Tax

The Reserve Bank has urged the government to take another look at a capital gains tax on investment in housing, allow increased high-density development and cut red tape for planning consents to address an over-heated Auckland property market. More>>

ALSO:

The Nation: Call For Cross-Party Auckland Housing Plan

Penny Hulse calls for cross-party accord on Auckland housing because “it’s too important to score political points on”. More>>

ALSO:

Flu Season: Overcoming Vaccination Reluctance

While research shows that 40% of New Zealand businesses offer free or subsidised flu vaccinations to employees this time of year, HR professionals say persuading staff to participate is the biggest challenge. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news