Expert Says Fonterra Backing Current Strategy With New CEO Appointment
The appointment of Richard Allen as Fonterra's new chief executive signals execution, not strategy, according to agribusiness expert Dr Nic Lees.
The co-op has lifted the mid-point of its forecast Farm gate milk price range by 25 cents to $7.30/kgMS. The new milk price range is now $7.00-$7.60/kgMS.
Fonterra chairman John Monaghan says the co-op has continued to earn good prices for its milk and as a result has increased the
“The higher price reflects a global dairy market that is tipped slightly in favour of demand.
“Our New Zealand milk production is forecast to be up 0.5% on last year. Annual milk production in the other key global supply regions of the US and EU are both growing at less than 1%.
“On the demand side, Global Dairy Trade prices have increased by about 6% since our previous forecast. Whole milk powder (WMP) prices, a key driver of our milk price, have hit their highest level since December 2016.”
Fonterra says at this stage of the year, it has contracted a good proportion of our sales book.]
Monaghan says that gives them the confidence to increase the mid-point of our forecast farm gate milk price range by 25 cents.
“Farmers will welcome what would be the fourth highest milk price in our history. It represents a $11.2 billion cash injection into our communities.”
