Strong production, tested demand send milk prices crashing
Strong global milk production and rebalancing of demand among key buyers has delivered one of the biggest drops in whole milk powder prices in recent years.
The plant's new owner Open Country Dairy says a final 'wash-up' payment will be paid to Miraka suppliers this month. On top of the base milk price, Open Country says it will also pay an average of $0.17/kgMS Te Ara Miraka payments under a farming excellence programme implemented by the previous Māori owners.
Miraka's base milk price for last season - a record - matches that paid by Fonterra and listed processor Synlait. Fonterra also announced a full-year dividend of 57c/share.
In a surprise move, Open Country, the country's second largest milk processor, bought Miraka last month. Media reports suggested Miraka was in financial strife and heading for potential liquidation when Open Country stepped in.
Open Country chief executive Mark de Lautour says it's been a great start to the season across the Waikato and Central North Island regions.
"We've already taken the opportunity to work with Central Transport Limited to optimise milk deliveries across the tanker fleet."
In a message to Miraka suppliers, he acknowledged the recent change in ownership of Miraka.
Read More:
- Open Country finalises acquisition of Miraka Limited
- Two milk processing plants changing hands
- Milk processors match or exceed Fonterra's record $10/kgMS opening forecast for 2025-26 season
"I trust this has not caused you undue concern and that you feel confident about the future with your milk processor.
"As your are now aware, it has been a difficult and turbulent period for Miraka. However, following our investment and support for the recent advance payment, we are pleased to confirm the final base milk price for the 2024/25 season is $10.16/kgMS."
De Lautour says they are planning a supplier meeting with Miraka suppliers this month to provide an update on markets and share more about what Open Country Dairy is working on across its sites nationwide.
"As we start to properly understand the challenges faced by Miraka, we are formulating options to ensure the Mokai site thrives into the future."
Announcing the sale last month, Miraka chair Bruce Scott said there is a lot for Miraka to be proud of over the past 15 years, having grown to become New Zealand's second largest Māori-owned exporter.
"However, there are significant challenges that come with being a stand-alone regional processor operating in a global market.
"Under Open Country Dairy's ownership, our Miraka whānau will be part of a strong NZ-owned network serving the global dairy market.
"Miraka will continue to [use] its current name and brand in the market, and will work closely with our suppliers, kaimahi, customers, key stakeholders and local community to ensure a smooth transition and long-term benefits for our community."
Open Country now operates five sites across the country and will add a sixth one once the Mataura Valley Milk sale is finalised. The company paid $125m to a2 Milk Company and its Chinese joint venture partner for the Mataura Valley plant.
Founded in 2010, Miraka became operational with its first batch of milk powder exports in August 2011 and has grown its production to around 300 million litres of milk per year.
