Record Milk Price to Ease Debt for Fonterra Farmers
Source: DairyNews.today
Fonterra’s record forecast milk price of NZ$10 per kilogram of milk solids (kgMS) has been welcomed as a much-needed financial boost for New Zealand’s dairy farmers.
Federated Farmers Waikato dairy chair Matthew Zonderop described the price hike as an early Christmas gift for the sector, offering relief amid rising costs and inflation pressures.
The cooperative announced a 50-cent increase in its forecast milk price mid-point, which Zonderop believes will help farmers reduce debt, upgrade machinery, and cover seasonal expenses.
“High interest rates, cost inflation, and other financial pressures have driven up debt for many of us,” Zonderop said. “Now’s the time to clear the roadblocks, and reducing debt is the priority.”
Seasonal Demands and Financial Impact
The announcement comes as December marks a busy period for dairy farms, with costs associated with silage production, cow mating, and bull purchases. Zonderop noted that the higher payout would allow farmers to settle these expenses more swiftly.
Fonterra CEO Miles Hurrell emphasized the cooperative’s commitment to delivering a sustainable milk price.
“We’re seeing a recovery of demand in Greater China, alongside strong demand from Southeast Asia, as domestic milk production rebalances,” Hurrell said. “Global milk supply from the U.S. and Europe remains constrained by local factors, while production in most parts of New Zealand has risen.”
Hurrell added that geopolitical uncertainty remains a potential risk to global supply and demand dynamics.
Fonterra maintained its FY25 forecast earnings at 40-60 cents per share, reflecting stability in operating profit despite higher milk costs. The cooperative plans to counter these costs by improving sales volumes, product mix, and pricing strategies.
Other Processors Follow Suit
Taupo-based Miraka has also increased its base milk price forecast to a mid-point of NZ$9.60/kgMS, within a range of NZ$9.10 to NZ$10.10/kgMS.
Miraka’s general manager of on-farm excellence, Joan Barendsen, acknowledged the hard work of their farmers in maintaining high standards of milk quality, sustainability, and animal welfare.
“We’ve released a strong milk price update to support their efforts and commitment to farming excellence,” Barendsen said.
Miraka suppliers can earn additional premiums of up to NZ$0.20/kgMS under the company’s Te Ara Miraka on-farm excellence program. Since 2015, Miraka has paid more than NZ$25 million in premiums to its farmers.
The cooperative announced a 50-cent increase in its forecast milk price mid-point, which Zonderop believes will help farmers reduce debt, upgrade machinery, and cover seasonal expenses.
“High interest rates, cost inflation, and other financial pressures have driven up debt for many of us,” Zonderop said. “Now’s the time to clear the roadblocks, and reducing debt is the priority.”
Seasonal Demands and Financial Impact
The announcement comes as December marks a busy period for dairy farms, with costs associated with silage production, cow mating, and bull purchases. Zonderop noted that the higher payout would allow farmers to settle these expenses more swiftly.
Fonterra CEO Miles Hurrell emphasized the cooperative’s commitment to delivering a sustainable milk price.
“We’re seeing a recovery of demand in Greater China, alongside strong demand from Southeast Asia, as domestic milk production rebalances,” Hurrell said. “Global milk supply from the U.S. and Europe remains constrained by local factors, while production in most parts of New Zealand has risen.”
Hurrell added that geopolitical uncertainty remains a potential risk to global supply and demand dynamics.
Fonterra maintained its FY25 forecast earnings at 40-60 cents per share, reflecting stability in operating profit despite higher milk costs. The cooperative plans to counter these costs by improving sales volumes, product mix, and pricing strategies.
Other Processors Follow Suit
Taupo-based Miraka has also increased its base milk price forecast to a mid-point of NZ$9.60/kgMS, within a range of NZ$9.10 to NZ$10.10/kgMS.
Miraka’s general manager of on-farm excellence, Joan Barendsen, acknowledged the hard work of their farmers in maintaining high standards of milk quality, sustainability, and animal welfare.
“We’ve released a strong milk price update to support their efforts and commitment to farming excellence,” Barendsen said.
Miraka suppliers can earn additional premiums of up to NZ$0.20/kgMS under the company’s Te Ara Miraka on-farm excellence program. Since 2015, Miraka has paid more than NZ$25 million in premiums to its farmers.
