Milk price certainty
Westland Milk has reaffirmed its commitment to pay farmer suppliers 10c above Fonterra farm gate milk price for the following two seasons.
On the back of declining international milk prices Westland Milk Products has reduced its predicted payout for the 2014-15 season.
Westland, New Zealand's second biggest dairy co-operative, advised shareholders that the predicted payout is now $4.90 - $5.10 per kilo of milk solids (kgMS) before retentions, down from the previously announced range of $5 to $5.40 per kgMS.
Chief executive Rod Quin says that before the recent GDT auctions a $5.20 payout seemed possible. However, customer sentiment has changed significantly.
"Skim milk powder out of Europe is being offered at US$2,100 – 2,200 per metric tonne which, for larger global buyers, is very attractive," says Quin.
He says this is well below offers from New Zealand of $2,600 - $2,800/MT and the GDT dairy auction itself, which has seen prices of $2,300 – $2,400/MT.
The high value of the New Zealand dollar also continues to play a part, he says.
"The New Zealand dollar remains strong at 76 - 77c against the US dollar, reflecting our official cash rate of 3.5%, our very low inflation, and relatively stable political environment."
According to Quin, Westland is well placed due to sales decisions made earlier in the season, but the co-operative will still have some exposure to the market place and the impact of lower prices for the remainder of the season.
"I expect the next three months to be very tough, with European processors aggressively selling their peak milk," he says.
"Not all European markets are producing more milk than last year, but enough are to drive an oversupplied situation."
Quin says current prices are unsustainable in terms of farm economics and this itself could help turn the market around through a reduction in production. He predicts that milk supply in Europe and the United States will slow, as it has in New Zealand.
"Westland's milk flows are now tracking down and we do not expect them to recover, given the lower pay-out forecast for this season."
Fonterra has cemented its position as the country’s number one cheesemaker by picking up nine NZ Champion of Cheese trophies this year.
New Zealand dairy processors are welcoming the Government’s commitment to continuing to push for Canada to honour its trade commitments.
An educational programme, set up by Beef + Land New Zealand, to connect farmers virtually with primary and intermediate school students has reported the successful completion of its second year.
The Food and Agriculture Organisation of the United Nations (FAO) has welcomed a resolution adopted by the United Nations (UN) General Assembly to declare 2026 International Year of the Woman Farmer.
Waikato herd health veterinarian Katrina Roberts is the 2024 Fonterra Dairy Woman of the Year.
Horticulture NZ chief executive Nadine Tunley will step down in August.
OPINION: Canterbury milk processor Synlait is showing no sign of bouncing back from its financial doldrums.
OPINION: It seems every bugger in this country can get an award these days.