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Fonterra news ‘as far from milk & disaster as the moon’

Fonterra news ‘as far from milk & disaster as the moon’

Farmers will be breathing a huge sigh of relief with Fonterra’s benchmark forecast payout for 2014/15 being held at $6 per kilogram of Milk Solids (kg/MS), while other aspects of the announcement are a great boost of confidence in New Zealand agribusiness.

“This is as far from milk and disaster as the moon is,” says Andrew Hoggard, Federated Farmers Dairy chairperson.

“While this season remains a super trim one last season was definitely a silver top one.

“The milk price hold is good news given there’s been widespread speculation about it sliding below the $6 mark, however, we’re not out of the woods yet. We still advise farmers to err on the side of caution by budgeting in the mid-$5 payout range.

“I tell you what though, news that Fonterra is putting $555 million more into Edendale and Lichfield, on top of what’s going into Pahiatua and elsewhere, represents a huge vote of confidence in the dairy industry and the provinces.

“It’s going to be a great shot in the arm for jobs building this new capacity, let alone the 75 full-time jobs that will be generated plus many more downstream jobs that will flow from it.

“We’re more than pleased to see this investment ahead of this season’s peak-milk, given last year’s buttermilk lakes represented a lost opportunity. Fonterra has recognised the need for more capacity with investments worth over half a billion dollars.

“It also shows how wrong it is to think that milk is a low value export.

“That’s shown by Fonterra stepping up in China with a joint venture taking up to 20 percent in Beingmate; a leading Chinese producer of infant formula.

“Let’s say it has been a long time between drinks, but it is right to get back on the horse.

“I feel Fonterra supplier-shareholders will back this investment of up to $615 million. It shows just how international Fonterra’s global reach is, something many Kiwis don’t understand.

“Look at the joint venture with Beingmate. It will take what we produce in New Zealand, along with paediatric products made at Darnum in Australia and whey specialty ingredients manufactured at Fonterra’s plant in the Netherlands.

“But this is just the start since New Zealand’s core competitive advantage and future lies in agribusiness,” Mr Hoggard concluded.


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