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

 

Fonterra raises Australian farmgate milk price

Thursday 27 October 2016 03:59 PM

Fonterra raises Australian farmgate milk price in response to stronger global dairy prices

By Sophie Boot

Oct. 27 (BusinessDesk) - Fonterra Cooperative Group's Australian business has raised its average farmgate milk price to A$5.10 per kilogram of milk solids and increased its forecast closing price due to strengthening global dairy prices.

In a statement, the Auckland-based dairy cooperative said it had increased its forecast closing price for the 2016/2017 season to A$5.20/kgMS. It had announced an opening price of A$4.75/kgMS in June, rising to A$5/kgMS by the end of the season. That compares with an A$5/kgMS payment for the 2015/16 season.

“Although the global market remains volatile, since the beginning of the season global milk supply has continued to decline significantly while demand has remained relatively stable," Fonterra Australia managing director René Dedoncker said. “We have seen positive movement in GlobalDairyTrade auction prices through August and September, with a 26 percent increase in the GDT price index since July, although the strong Australian dollar has offset some of the commodity market gains.”

Australia's dominant milk processor Murray Goulburn today lifted its payout to A$4.95 per kilogram of milk solids for the full season. In June, it announced an opening forecast of a net A$4.31/kgMS, which it expected to rise to A$4.80/kgMS by the end of the season. Fonterra is obliged to at least match Murray Goulburn’s price under its Bonlac supply agreement.

Dedoncker said Fonterra has made "strong progress" in turning around its Australian business, which has underperformed for several years in an environment of fierce competition for milk supply and over-capacity in dairy production. It has started its joint venture with Chinese infant formula company Beingmate and begun producing dairy nutritionals for Bellamy's Organics as well as expanding its cheese and butter capacity.

"Winning in cheese and nutritionals is core to our strategy to become Fonterra’s global ingredients hub for cheese, whey and nutritionals, complementing our consumer and foodservice businesses," he said. "This is helping us move our farmers’ milk up the value chain into products generating higher returns, which ultimately flows back to the farmgate."

Individual suppliers’ milk prices will vary across regions, depending on the individual farm’s milk profile, regional production factors, milk quality and farm management systems, the company said.

Units of the Fonterra Shareholders' Fund last traded at $5.90 and have slid 1.5 percent this year.

(BusinessDesk)

ends

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Westpac: Sets Out Plan To Go Cheque-Free

Westpac NZ has announced details of its plan to phase out cheques, after signalling in May that it would be supporting a move to other forms of payment. Cheques will cease to be available as a means of payment after 25 June 2021. Westpac NZ General ... More>>

ALSO:

NZTA: Major New Zealand Upgrade Programme Projects Go To Tender

Two major New Zealand Upgrade Programme projects are beginning tenders for construction. The New Zealand Upgrade Programme is a $6.8 billion investment to get our cities moving, to save lives and boost productivity in growth areas. The first Auckland ... More>>

Reserve Bank: RBNZ Seeks To Preserve Benefits Of Cash

The Reserve Bank – Te Pūtea Matua is taking on a new role of steward of the cash system “to preserve the benefits of cash for all who need them”, Assistant Governor Christian Hawkesby told the Royal Numismatics Society of New Zealand annual conference ... More>>

ALSO:

Economy: Double-Dip Recession Next Year, But Housing Rolls On

New Zealand's economy is expected to slip back into recession early next year as delayed job losses, falling consumer spending, and the absence of international tourists bites into growth. More>>

ALSO:

Microsoft New Zealand: Microsoft Expands “Highway To A Hundred Unicorns” Initiative To Support Startups In Asia Pacific

New Zealand, 14 October 2020 – Today Microsoft for Startups launches the Highway to a Hundred Unicorns initiative in Asia Pacific to strengthen the region’s startup ecosystem. This follows the initiative’s success in India, where 56 startups were ... More>>

Fonterra: Farmers Taking Another Step Towards New Zealand’s Low Emissions Food Production

They’re hot off the press and intended to help take the heat out of climate change. Fonterra farmers are already among the world’s most sustainable producers of milk and now have an additional tool in their sustainability toolbox. Over the last few ... More>>

ALSO:



Courts: Businessman Eric Watson Sentenced To A Four-Month Jail Term

New Zealand businessman Eric Watson has been sentenced to a four-month jail term in the UK for contempt of court, TVNZ reports. More>>

OECD: Area Employment Rate Falls By 4.0 Percentage Points, To 64.6% In Second Quarter Of 2020

The OECD area employment rate – the share of the working-age population with jobs – fell by 4.0 percentage points, to 64.6%, in the second quarter of 2020, its lowest level since the fourth quarter of 2010. Across the OECD area, 560 million persons ... More>>

Spark: Turns On 5G In Auckland And Offers A Glimpse Into The Future Of Smart Cities

Spark turned on 5G in downtown Auckland today and has partnered with Auckland Transport (AT) to showcase some of the latest in IoT (Internet of Things) technology and demonstrate what the future could look like for Auckland’s CBD with the power of 5G. 5G is ... More>>

Stats NZ: Monthly Migration Remains Low

Since the border closed in late-March 2020, net migration has averaged about 300 a month, Stats NZ said today. In the five months from April to August 2020, overall net migration was provisionally estimated at 1,700. This was made up of a net gain ... More>>

University of Canterbury: Proglacial Lakes Are Accelerating Glacier Ice Loss

Lake Tasman, New Zealand | 2016 | Photo: Dr Jenna Sutherland Meltwater lakes that form at glacier margins cause ice to recede much further and faster compared to glaciers that terminate on land, according to a new study. But the effects of these glacial ... More>>

ALSO:

Dairy: Fonterra Sells China Farms

Fonterra has agreed to sell its China farms for a total of $555 million (RMB 2.5 billion*1), after successfully developing the farms alongside local partners. Inner Mongolia Natural Dairy Co., Ltd, a subsidiary of China Youran Dairy Group Limited ... More>>

ALSO: