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

Cracked China

OPINION: Your old mate reckons Fonterra and its dairy farmer shareholders may well be all cock-a-hoop about the prospects of a near $8 payout this year and one north of $8 next year.

An eye on the future

Fonterra recently announced a forecast milk price range for the coming season of $7.25 to $8.75 per kgMS, with a midpoint of $8.00 per kgMS.

National

SIDE heading to Ashburton

For the first time in its 23-year history, the two-day South Island Dairy Event (SIDE) is heading to Ashburton.

Open days on feeding calves

A series of open days will run in the North Island this month on controlling feed intake of calves and…

Rankin gets board role

The 2019 Dairy Woman of the Year, Trish Rankin, is joining AGMARDT as an associate board member.

Machinery & Products

Major deal for AgriQuip

New Plymouth-based AgriQuip has been appointed as the exclusive importer and distributor of the Major Equipment brand, with the aim…

Giant stands tall on goat farm

A Dutch Giant is playing such an important role at Schuler Brothers' Te Aroha West goat farming operation that the…

» The RNG Weather Report

» Latest Print Issues Online

Milking It

Nestle's admission

OPINION: It is the biggest dairy company in the world but Nestle is under pressure after admitting that more than…

Milk is healthy

OPINION: Promoters of 'healthy' plant-based 'milk' take note! Regular consumption of cow milk is not associated with increased levels of…

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter