Farmers welcome Fonterra's certainty

Fonterra Cooperative Group’s confirmation its current season forecast will be held, is of relief to Fonterra’s dairy farmers.

“This confirmation is welcome because just like everyone else, Fonterra’s shareholders and suppliers have been watching globalDairyTrade closely,” says Robin Barkla, Federated Farmers Dairy vice-chairperson

“After a hard winter and towards the end of calving, dairy farmers can now sit down and crack a smile. This will definitely give farmers and their families a boost as the new season’s production starts to ramp up. It also continues a run of good numbers the cooperative has delivered.

“globalDairyTrade is a factor in the forecast but it is far from being the only factor. There’s a lot of value add that is built into the milk we produce.

“Take Fonterra’s pharmaceutical joint venture with fellow dairy cooperative, Royal FrieslandCampina. This week it acquired the Indian company, Brahmar Cellulose, with the aim of becoming the world’s leading supplier of pharmaceutical lactose excipients.

“The milk price forecast of $6.75 per kilogram of milksolids (kg/MS), if expressed as a litre of milk, works out to be just under 66 cents a litre too.

“It all means farmers can keep their budgets on track but Federated Farmers still advises a degree of conservatism.

“The world economy remains sticky and potential in-season volatility of $2 kg/MS is a factor. Our overall advice is to run conservative budgets in order to bank the gains later,” Mr Barkla concluded.