UPDATED: Fonterra lowers NZ milk collection forecast for this season

(Note: this story has been updated to reflect an amended statement received from Fonterra   the orginal statement said the dairy cooperatve expects to collect four percent less milk this season)

Cooperative Group expects to collect 3 percent less milk from its New Zealand suppliers this season than it did in the prior season as dry weather stunts grass growth and lowers milk production.

Auckland-based Fonterra revised its forecast for its New Zealand milk collection for the current 2017/18 season to 1,480 million kilograms of milk solids, down 3 percent from the 1,525 million kgMS it collected in the 2016/17 season, it said. In December it had forecast milk collection would be in line with the previous season.

Fonterra, the world's largest milk processor, said wet conditions experienced by farmers at the beginning of spring improved from late October and into November, but recent dry weather is continuing to impact soil moisture and pasture quality right across the country. Dry conditions are expected to continue, and even if the rain forecast for early in 2018 eventuates, it will not be enough to bring production back to previously anticipated levels, it said.

The price of whole milk powder rallied 4.2 percent to US$2,886 a tonne in the Global Dairy Trade auction overnight, after Fonterra said it has begun to take volumes of whole milk powder off the auction platform in response to the lower milk supply and will carefully manage sales on and off GDT for the rest of the season as a result of the current weather conditions.

Some 13,255 tonnes of whole milk powder was offered at the GDT auction, 19 percent less than at the previous GDT ahead of Christmas. Fonterra advised last week that it plans to reduce the volume of whole milk powder that it plans to sell on GDT in 2018 by 10,011 tonnes, or 1.6 percent, from its previous forecast.

Units in the Fonterra Shareholders Fund, which gives investors exposure to Fonterra's earnings, last traded at $6.41, having gained 6.8 percent over the past year.

(BusinessDesk)


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Fonterra collecting less milk, GDT auction prices heading south again and BeingMate stock sitting at all-time lows of 7.12 yuan (sitting on a massive 62%+ loss and $470M NZD). What's that gearing rate at again as well, 50%+?

Yes, 2018 will certainly be an "interesting" year for Fonterra and it's well, well overpaid management!

Wonder if Theo will "cut" his salary again, only to reinstate in 2 years time when things turn up again?

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and the Danone outcome!

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Bad news for the farmers is mitigated by the fact that the salaries of Fonterra's top management will rise to offset the reduction of their own' income.

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Throw in a wet autumn and the "drop" in supply will be insignificant the GDT average will stay flat. Nice try though.

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Where do you get your crystal balls from? Mine's broken.

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I am in the "drought-stricken" Manawatu where the grass has kept growing (where rotation -length and stocking- rate were appropriate to summer conditions); the summer seems to have been normal ,( though somewhat short-lived,) and on-farm feed reserves have rarely been better.
Try looking out the window

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Is this the same for the other NZ processors?
Is Fonterra losing market share to Synlait, Westland, Talley's and Oceania?

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The "headwinds" of distorted public perceptions (or fake news , if you like) show no signs of abating. Perhaps the startegy of selling milk powder to the world's poor still has some merit. The hungry are less discerning.
In the long run the vegans lose though ; "let them eat grass" :-)

https://www.alternet.org/animal-rights/10-terrible-things-dairy-industry...

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