Saturday, March 30, 2024

Fonterra’s milk collections down by all measures

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Fonterra’s latest Global Dairy Update shows that its milk collections are down for both the month of November and the season to date. Its collections for November totalled 208.7 million kilograms of milksolids (kg MS), down 3.5% on November 2014. Cumulative volume for the season-to-date is 736.6kg MS, down 4.4% from this time last season.
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North Island milk intakes were 5.9% lower for the month of November while in the South Island milk intakes were slightly higher by 0.4%. Fonterra also collected less milk from its Australian suppliers. For November Australia milk intakes were 3.6% lower, but are still slightly ahead on a seasonal basis.

In addition, Fonterra has reduced its forecast for total milk collections for the 2015-16 season. It now expects milk collections across the season to be down 6% on the 2014-15 season. Fonterra states “the decrease in forecast milk collection is a result of the low Farmgate Milk Price environment, where farmers are using more traditional practices to manage their business within the limits of a low payout.” Culling activity has been higher than usual this season, and farmers have been reducing the amount of supplementary feed they’re buying.

Source: Fonterra

In this update Fonterra also focused on its strategic plan to expand business in Australia, having made a number of advancements in this market over the past month. Fonterra’s joint venture with Chinese company, Beingmate, was formally approved by shareholders and involved the purchase of Fonterra’s Darnum plant. Fonterra entered a five-year strategic agreement with Bellamy’s to manufacture baby nutritional powders. It sold its 9% shareholding in Bega Cheese to release capital. The capital will be invested in a cheese-making facility at its Stanhope factory, which will replace the cheese plant that was destroyed by fire in 2014. 

Fonterra's full update is available here.

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