Will Fonterra margin pressure see retail milk prices rise?

Morningstar’s senior equities analyst Nachi Moghe says Fonterra's [NZX: FCG] mix of high commodity prices and a $157 million “write-off” for the first quarter of the 2014 financial year is a double-whammy for the co-operative.

As part of its November global dairy uptake, Fonterra yesterday announced it has taken $157 million of additional provisioning in that quarter as higher input costs begin to bite into future earnings and the final value of inventory currently on hand.

 

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