Farmers' call
OPINION: Fonterra's $4.22 billion consumer business sale to Lactalis is ruffling a few feathers outside the dairy industry.
Fonterra farmers start the new season this week on a high note.
Last week the co-operative announced its 2022/23 opening forecast farmgate milk price, set at a range of $8.25 - $9.75/kgMS, with a midpoint of $9/kgMS.
The co-op is maintaining its 2021-22 forecast price of $9.10 - $9.50/kgMS. At a midpoint of $9.30/kgMS, this would be the highest forecast milk price in the co-op's history.
Chief executive Miles Hurrell says this would see the co-op contribute almost $14 billion into the New Zealand economy through milk price payments.
Dairy prices have eased in recent Global Dairy Trade (GDT) auction, however prices are expected to remain at historically high levels due to subdued supply and surging demand.
China's recent lockdowns of cities hit by Omicron has created a dip in demand but this is expected to be short lived.
Hurrell says the strong opening forecast reflects continued demand for dairy coupled with contstrained global supply.
"The long-term outlook for dairy remains positive, despite recent geopolitical and Covid-19 related events impacting global demand in the short-term.
"On the supply side, growth from key milk producing regions is expected to remain constrained as high feed, fertiliser and energy costs continue to impact production volumes.
"These demand and supply dynamics are expected to support dairy prices in the medium to long-term."
But Hurrell warns that we are in an increasingly volatile global environment and are managing a wider range of risks than usual.
This includes the potential for further impacts from Covid-19, financial markets and foreign exchange volatility, global inflationary pressures, a tightening labour market, increasing interest rates, geopolitical events, as well as the possible impact on demand from higher dairy prices.
"This is why our 2022-23 forecast range is so wide at this point in the season," he adds.
Academic Dr Mike Joy and his employer, Victoria University of Wellington have apologised for his comments suggesting that dairy industry CEOs should be hanged for contributing towards nitrate poisoning of waterways.
Environment Southland's catchment improvement funding is once again available for innovative landowners in need of a boost to get their project going.
The team meeting at the Culverden Hotel was relaxed and open, despite being in the middle of calving when stress levels are at peak levels, especially in bitterly cold and wet conditions like today.
A comment by outspoken academic Dr Mike Joy suggesting that dairy industry leaders should be hanged for nitrate contamination of drinking/groundwater has enraged farmers.
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