Misguided campaign
OPINION: Last week, Greenpeace lit up Fonterra's Auckland headquarters with 'messages from the common people' - that the sector is polluting the environment.
Soaring whole milk powder (WMP) prices are lifting forecast milk price to Fonterra farmer suppliers but it is also affecting the co-op’s profitability.
Fonterra’s first quarter results have taken a $60 million hit, thanks mostly to WMP prices rising 30% compared to first quarter results last year.
The co-operative has delivered a total group earnings before income and taxes (EBIT) of $190 million for the three months ending October 31.
Chief executive Miles Hurrell says there have been a number of factors at play in the first quarter.
“We’re seeing stable sales volumes in our foodservice channel, but a milk price at these high levels has squeezed margins. Our Chilean business continues to improve but tightening margins and weaker local currency in other markets have impacted our consumer channel overall.
“In our Ingredients channel, we’re seeing margins in our longer-term pricing contracts return to more normal levels, which has helped push Total group gross margin up from the last quarter last year.
“We continue to see the benefit of our focus on financial discipline with lower interest expense, and operating expenditure down 2% on the same quarter last year.”
Hurrell says “looking at the whole picture”, he’s proud of what’s been achieved.
“With EBIT of $190 million and a strong farmgate milk price, we are starting to consistently deliver solid commercial outcomes.”
While the impacts of COVID-19 continue to be felt around the world, Hurrell says the co-op is working hard to deliver for farmer owners, unit holders and customers and supporting employees.
“The resilience of our people and our supply chain means we continue to stay on top of the strong demand for our New Zealand milk.”
“However, it is concerning to hear about new variants, which are potentially more resistant to vaccines. There is also the ongoing question of whether economies can rebound from the pandemic and then sustain their financial health.”
Federated Farmers president Wayne Langford says the 2025 Fieldays has been one of more positive he has attended.
A fundraiser dinner held in conjunction with Fieldays raised over $300,000 for the Rural Support Trust.
Recent results from its 2024 financial year has seen global farm machinery player John Deere record a significant slump in the profits of its agricultural division over the last year, with a 64% drop in the last quarter of the year, compared to that of 2023.
An agribusiness, helping to turn a long-standing animal welfare and waste issue into a high-value protein stream for the dairy and red meat sector, has picked up a top innovation award at Fieldays.
The Fieldays Innovation Award winners have been announced with Auckland’s Ruminant Biotech taking out the Prototype Award.
Following twelve years of litigation, a conclusion could be in sight of Waikato’s controversial Plan Change 1 (PC1).
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