Thursday, 27 February 2020 09:25

Fonterra keeps payout forecast despite coronavirus woes

Written by  Staff Reporters
Fonterra chief executive Miles Hurrell. Fonterra chief executive Miles Hurrell.

Fonterra is sticking to its forecast farmgate milk price range at $7-$7.60/kgMS despite the global uncertainty around coronavirus.

The co-op is also maintaining its forecast full-year underlying earnings guidance of 15-25 cents/share.

But the co-op has revised its forecast milk collections for the 2020 season: down from 1,530 million kgMS to 1,515 million kgMS due to poor weather conditions.

Fonterra chief executive Miles Hurrell says the co-op remains confident despite current market conditions as a result of coronavirus. 

“The momentum we saw in the first three months of the financial year has continued, and as we approach the interim results our underlying earnings are tracking well. However, given the potential significant risks that could arise from coronavirus in the second half, we are taking a prudent approach and maintaining our full-year forecast earnings range.  

“The current situation is very fluid and uncertain. However, we have already contracted a high percentage of our 2020 financial year’s milk supply and this is helping us manage the impact of coronavirus. 

“Our Greater China team are working hard to keep our operations running as smoothly as possible. Without them this would not have been possible and I want to thank them for their efforts. 

“There has been a slow-down in processing of containers at ports and we are managing the flow of our product into China carefully to avoid congestion. Currently, our product is continuing to be cleared by customs and quarantine officials. 

“In China, people continue to face movement restrictions due to the outbreak. This means many restaurants and food outlets are closed, which is having a major impact on the operations of our Foodservice customers. Our sales teams are working with these customers to help them where they can. 

“We will provide a further update on the impact of coronavirus on our business when we announce our interim result on 18 March.”   

Commenting on the co-op’s milk collections forecast, Hurrell says they are due to be down because of the weather conditions across several parts of New Zealand.

“We have recently seen a reduction in milk collections and our farmers are facing ongoing challenging weather. We’ll continue to work with them to ensure that if they need extra support that they are able to access it.”

More like this

No easy ride for struggling sheep farmers

Stubbornly high farm input costs, a slow Chinese recovery and a flood of Australian lamb onto the global market are the main factors contributing to the tough times being faced by NZ's sheep farmers.

Fonterra posts solid results

Fonterra has delivered a solid half-year result, thanks to higher margins and sales volumes across the co-op's diversified product and category mix.

Featured

Sheep drench resistance costly

Analysis by Dunedin-based Techion New Zealand shows the cost of undetected drench resistance in sheep has exploded to an estimated $98 million a year.

Dairy sheep and goat turmoil

Dairy sheep and goat farmers are being told to reduce milk supply as processors face a slump in global demand for their products.

Hurry up and slow down!

OPINION: We have good friends from way back who had lived in one of our major cities for many years.

National

Govt urged to reduce ETS units

The Climate Change Commission wants the new Government to reduce NZ Emissions Trading Scheme (ETS) auction volumes as son as…

Dairy sheep, goat woes mount

Dairy sheep and goat farmers are being told to reduce milk supply as processors face a slump in global demand…

Machinery & Products

All-terrain fert spreading mode

Effluent specialists the Samson Group have developed a new double unloading system to help optimise uphill and downhill organic fertiliser…

Can-Am showcases range

Based on industry data collected by the Motor Industry Association, Can-Am is the number one side-by-side manufacturer in New Zealand.

» Latest Print Issues Online

Milking It

Papal visit

OPINION: European farmers are going to extreme lengths to have their message heard.

Thai egg tarts

OPINION: The hustle and bustle of one of Bangkok's most popular fast food outlets may feel a world away from…

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter