Saturday, March 30, 2024

OMF NZ Dairy Futures report – December 11, 2013

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NZX Futures continues to trade higher NZX futures continue to move higher.  We traded a January to April strip of WMP; Jan up $40 to $5110, Feb up $20 to $5070, Mar up $100 to $5070 and Apr up $10 to $4960.  SMP also traded Jan to Mar – all up $50 to $4990, $4900 and $4850. Fonterra maintain payout  Fonterra cuts dividend forecast to 10 NZ cents per share from 32 cents: • Says forecast milk price is current best estimate, may change over course of season given volatility• CEO Spierings: “We will maintain our financial discipline and not pay the milk price out of borrowings”• Spierings says this season Fonterra devoted maximum possible volume of milk to whole milk powder and skim milk powder streams to maximise payments to farmers• “However, we have not been able to lift powder production above the current 70% level as we are limited by the nature of Fonterra’s existing production facilities in New Zealand”• Remaining 30% of milk is being converted to cheese and casein, which are currently generating lower returns• Strong price for milk powder being driven by increasing demand from China, emerging economies• Demand increasing at faster rate than predicted• Board approved NZ$235m for development of third powder drier at Pahiatua in the lower North Island• Last week opened world’s largest powder drier at Darfield in Canterbury
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