Wednesday, 12 December 2018 08:41

Fonterra farmers to fix the price of their milk

Written by 
Robert Spurway. Robert Spurway.

Fonterra is giving farmers the option to fix the price of some of their milk.

The co-op is introducing a new tool called Fixed Milk Price. It joins a set of seven of Fonterra’s financial tools and aims to assist farmers with budgeting, planning, and managing on-farm profitability.  

Farm Source and global operations chief operating officer Robert Spurway says the co-op is committed to making a difference for Fonterra farmers and providing flexible options to help them share up, invest on farm, and manage financial exposure.

“This season reminds us of the volatility in the global marketplace and the impact it can have on the milk price. While the co-op manages this volatility as best it can when selling our products, we recognise that it’s farmers who feel the brunt of it.

“In addition to providing farmers with the opportunity to get more price certainty, the Fixed Milk Price will also provide the co-operative with certainty on the margins it can achieve on a portion of milk supplied. It’s a win-win,” says Spurway.

How it will work

- All Fonterra farmers will have the opportunity to participate on a monthly basis (excluding January and February)

- The Fixed Milk Price will be referenced to the NZX Milk Futures Market, minus a service fee of no more than 10c/kgMS initially

- Over the course of a season, farmers will be able to fix up to 50% of their estimated milk production per farm

- Fonterra will make at least 1 million kgMS available at every event and up to a total of 5% of New Zealand milk supply available in a given season

More like this

Co-op decarbonisation leader's Antarctic trip

At the beginning of November 2023, Linda Mulvihill, Fonterra’s general manager energy & climate, flew to Ushuaia, Argentina, where she boarded a ship and began a 19-day voyage to Antarctica.

Spread too thin?

OPINION: With current dairy returns so tight, Fonterra farmers may start to question the wisdom of some of the co-op's more charitable ventures.

Featured

Maui Milk blames supply/demand imbalance

Sheep milk processor Maui Milk says it’s one of many companies being impacted by the imbalance between supply and demand for New Zealand sheep dairy products.

Feds offer support for Maui Milk suppliers

Federated Farmers is arranging support for a small group of dairy sheep farmers in the North Island, who were told this week to stop milking by processor, Maui Milk.

National

Next generation of DNA testing

Herd improvement co-operative LIC is combining its DNA parentage testing and genomic evaluation services into one convenient service to help…

DCANZ rejects Canadian proposals

New Zealand dairy processors are rejecting new Canadian proposals for the administration of its dairy tariff rate quotas (TRQs) under…

Machinery & Products

Twin-axle slurry tankers on debut

French manufacturer Pichon, imported and retailed in New Zealand by Norwood, has introduced two new twin-axle ‘Slurry Vacuum’ SV slurry…

Make that large please!

KUHN Farm Machinery has introduced a new flagship FC 13460 RA trailed mower conditioner, in the shape of the FC…

» Latest Print Issues Online

Milking It

Cows meta to Zuckerberg

OPINION: Mark Zuckerberg's multimillion- dollar housing project on Hawaii is attracting a lot of interest.

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter