Fonterra investing $70m in new electrode boilers
While opening the first electrode boiler at its Edendale site, Fonterra has announced a $70 million investment in two further new electrode boilers.
Fonterra updated its farmgate milk price to $4.15/kgMS in January versus $4.40/kgMS last year, Wilson told the Northland Dairy Development Trust.
"So it's our second year of very low prices onfarm," he said.
"One thing not being talked about... and which we need to adapt to, is that we clearly have an economy which is being supported, which is good, and more diversity than the influence of dairy in the past."
Historically if global whole milk and skim milk powder prices dropped to current levels the NZ dollar would have dropped to the low fives; giving a 50-55c (versus $US) exchange rate.
Net migration, the Canterbury rebuild and a strong tourism sector were causing the NZ dollar to be valued.
"So we've got a dollar which is strong relative to where we would normally be at these sorts of global commodity prices," he said.
"All these factors are clearly making it very difficult on farm."
