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17 Deer industry on path to better things Vol 21 No 20, May 29, 2023
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Fonterra whips up tasty earnings But price outlook will prompt jitters Hugh Stringleman
NEWS
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Fonterra
ONTERRA has produced sizzling third-quarter financial results while keeping farmgate milk price expectations on the simmer for this season and the next. Farmer-shareholders and unit investors will be counting their cash dividends to come – 60c a share capital repayment in August and perhaps another 40c after the end-of-year financials are announced in September. But farmers will be nervous about the current downward trend in milk prices, given the uphill gallop of input costs and interest repayments. The new season will begin in one week with an $8/kg midpoint forecast, down 20c from the old season and down $1.30 from 2021-22. On the plus side, Fonterra has increased by 30c the new Advance Payment Rates, which will begin at
$6 for the first seven months of the season. This will be 75% of the mid-point of the forecast range, compared with 60-65% historically. CEO Miles Hurrell said the strength of Fonterra’s balance sheet enables it to get more cash to farmers earlier, to help with the rising tide of costs. The balance sheet is in a very strong position, incorporating the proceeds from the sale of Soprole, enabling the capital return of $800 million to be brought forward to August. Regarding the market outlook, Hurrell said the new milk price forecast reflects gradually rising demand for whole milk powder in China as its economy continues to recover from covid. “However, the timing and extent of this remains uncertain, with China’s in-market whole milk powder stocks estimated to be above normal levels following increased domestic production. Continued page 3
Heading for the hills Dogs wait patiently on the back of a vehicle at the New Zealand Sheep Dog Trial Championships at Warepa, near Balclutha. Look out for a wrap of the event in next Photo: Kayla McKenzie Photography week’s edition.
Class act as high school fencers lend a hand Geraldine High School students, from left, Matthew O’Connor, Quinn Foley-Smith and Aidan Christie, were part of a Fencing Contractors Association project at Ōtāne in Hawke’s Bay, working to make a dent in the re-fencing of farms hit by Cyclone Gabrielle. The students are part of the Primary Industry Academy.
PEOPLE 7 An AgriHQ initiative aimed at attracting young people to the primary sector will launch next month.
Mānuka honey producers will stand together and battle on, they say after bruising trademark loss.
Farmers Weekly unpacks the carbon sequestration implications of various on-farm tree scenarios.
NEWS 9
MARKETS 10
TECHNOLOGY 18