$4.25 Per Kg/Ms a Tough Number for Farmers to Hear
$4.25 Per Kg/Ms a Tough Number for Farmers to Hear But One That is Reflective of Market Realities
Fonterra Shareholders’ Council Chairman, Duncan Coull said today’s announcement by Fonterra of an opening forecast Milk Price for the 2016/17 season of $4.25 per kg/MS would be a tough number for Farmers to hear but was a reality of where the market is at present.
Mr Coull: “The signal Farmers have received from their Board today is that while there are encouraging signs and the market should move in a positive direction over the next 12 months it would be slow to do so.
“However, we as Farmers are very well-tuned to volatility and its capacity to fluctuate and will have this front of mind as we work through our budgets for the coming year.
“It is also important that we take into account that this is a forecast for a season which has not even begun so, as we move through the year it is vital that Farmers continue to read the signals being delivered by the market and our Co-op, and act appropriately.
“Fundamental to this is that Fonterra communicates any significant pricing shifts to our Farmers in a timely and transparent manner.”
Mr Coull also acknowledged the opening advance rate of $3.01 per kg/MS which he said spoke to the strength of the Co-op’s balance sheet.
“Farmers can look to this as an indication that
their business is in a strong position, and that their Board
is aware of the current situation on-farm and has a desire
to relieve cash-flow pressure where possible.
“However, the current environment is placing additional stress on us all and as such there is a need for us all to continue stay engaged in our communities and support our friends and neighbours.”