The GMP scheme is a financial tool which enables farmers to manage price volatility by securing a portion of income through locking in a milk price for a part of their total milk production.
Fonterra Head of Origination Arron Atkinson said: “Farmers had the opportunity to apply for GMP for a percentage of their estimated milk production at one or more of five prices equal to and below the opening forecast Farmgate Milk Price. All applications were accepted and a $7 per kgMS guaranteed price was determined."
All applications were accepted and a $7 per kgMS guaranteed price was determined
Arron Atkinson
Fonterra Head of Origination
Applicants are reported to have ranged from small to large sized farms throughout New Zealand.
The pilot scheme introduced in the 2013-14 season offered 15 million kgMS at the season opening forecast price of $7/kgMS. Additional volumes were proportionally scaled back, with Fonterra accepting 40% of the 37 million kgMS offered by the 328 pilot scheme participants.
This time around, Fonterra plans to accept 60 million kgMS in two parts, with up to 40 million kgMS accepted in June and up to 20 million kgMS in December. With two intake periods, participants can reevaluate their financial decisions to accommodate shifts in on-farm costs or conditions that have occurred in the first half of the season.
