Tag Archives: Fonterra

NEW ZEALAND – First Year of Effluent Risk Assessment Completed – June 22, 2011

NEW ZEALAND – Fonterra has completed its first Every Farm Every Year check of on-farm effluent with independent assessors completing the first ever risk assessment on every supplying farm.

“We now have a clear picture of where our farms are at, who is doing well and who needs help. The majority are doing well and we can give credit where it’s due. Now we’re concentrating on those who need help and that support is being welcomed,” said Fonterra’s Director of Supplier and External Relations, Kelvin Wickham.

Every Farm Every Year is Fonterra’s programme to help farmer shareholders improve compliance with council effluent rules. Since its launch in August 2010, independent assessors from AsureQuality or QCONZ have visited all 10,500 supplying farms, checking if effluent infrastructure is compliant, non-compliant or even at risk of non-compliance.

Fonterra received 2,800 referrals to its Sustainable Dairying Advisors team. These involve farms assessors have identified with compliance issues or the risk of them and farms where shareholders have proactively self-referred to get advice. The advisor team has completed 1940 one-one-one visits with referred farmers.

“To date we have 1200 farms with effluent improvement plans in place and of those, 600 plans have already been completed.”

Mr Wickham said the Every Farm Every Year check on every single farm had sorted out where Fonterra needed to focus its efforts first.

He said that while the number of referrals was higher than initially forecast, that was the result of Fonterra broadening the scope to include farms that might be at risk of non-compliance in the future.

“Because we have widened the scope, we have advised farmers it might take us a bit longer to get to them to help them develop their effluent improvement plans.

“We know that not all councils have the resources to get out to every single farm in their area. We also know farms can and do pass compliance spot checks, but may then run into problems if there is an extended wet period, they have to defer irrigation and their effluent storage proves temporarily inadequate.

“Council expectations can also change from one year to another. For example, feed pads and entry and exit races have been recently included in monitoring. This is positive, but it does mean farmers can have risks they weren’t aware of under their existing consents. That’s why we are identifying farms at risk of non-compliance. That has meant a heavier workload, but it’s also meant we have a clear picture on a farm-by-farm basis for the first time.

Mr Wickham said Fonterra had hired more people to implement the programme and this investment was being matched by farmers who were putting place remedial plans. Plans could cost up to $100,000 to implement, depending on whether major infrastructure, such as additional effluent storage ponds, was required.

“Plans do cost money, but our experience is that farmers are welcoming the support and advice and responding well. In March, 252 plans had already been actioned and today that’s up to 600.”

Mr Wickham said Every Farm Every Year would turn the compliance tide over time.

“We will not achieve 100% compliance overnight. Even farms doing well now are always at risk of gear failure, or storage problems caused by long periods of heavy rain. That is the nature of farming and we will just have to maintain the effort.

“Positively though, farmers recognise the need for year-round compliance and are getting a better understanding of the risks in areas such as effluent storage capacity, irrigation systems and feed pads or standoffs.”

Information TheCattleSite News Desk


CHINA – China’s Chief Vet Meets Fonterra CEO – June 16, 2011

CHINA – On 31 May 2011, Chief Veterinary Officer Yu Kangzhen met with New Zealand Fonterra Co-operative Group Global CEO Andrew Ferrier. They exchanged views on matters related to strengthening cooperation in the field of dairy industry.

Mr Kangzhen said he greatly appreciated the development of dairy cooperation between China and Fonterra, acknowledging the increase in NZ dairy exports to China.

Mr Kangzhen said that NZ could continue to help China in many ways:

  • Cooperation in supervision over quality and safety of fresh milk
  • Exchanges in breeding and improvement of dairy cows
  • Technical cooperation in quality and safety of fresh milk production
  • Demonstrations of large-scale dairy cow farming
  • Strengthening of dairy farmer training and technical skills

Mr Ferrier agreed with what Mr Kangzhen said, and noted that Fonterra would have closer cooperation and coordination with various authorities and regions through joint efforts for greater achievements.

Information TheCattleSite News Desk

NEW ZEALAND – Print This Page Fonterra To Tap Hong Kong Bond Market – June 17, 2011

NEW ZEALAND – Fonterra Cooperative Group, the world’s biggest dairy exporter, will look to tap Hong Kong investors for some 300 million renminbi in its first Chinese currency denominated bond issue.

The sale is the first of its kind for an Australasian company in Chinese yuan deliverable in Hong Kong, and the proceeds will be used to support growth in its Chinese business. HSBC will run the book and lead manage the sale.

Fonterra China president Philip Turner said the unit is growing rapidly, and expects to tap second- and third-tier cities over the next three years. It aims to triple the value of its Chinese market to US$70 billion by 2020.

“We see huge potential to expand the breadth of products we offer in China, as well as the geographical distribution of our customer brands and foodservice dairy products,” Turner said in a statement. “We are also exploring opportunities to produce and sell a range of premium value-added dairy ingredients for key customers on the ground in China.”

The sale comes a week after the dairy exporter flagged its first bond issue in Australian dollars. General Manager Treasury Stephan Deschamps said the renminbi issue is part of a strategy to spread its debt across different markets.

Fonterra has a 6,000-cow factory farm at Tangshan, in China and is planning a second such facility. It has agreed to a joint feasibility study with Indian Farmers Fertiliser Co-operative for a pilot dairy farm in India, the world’s second-most populous country after China.

Last month it bought a dairy farm in Brazil, which is expected to start producing milk by late 2014 with a total herd of some 3,300 cows.

Information TheCattleSite News Desk

NEW ZEALAND – Fonterra Forecast Payouts Increase – May 24, 2011

NEW ZEALAND – Fonterra has announced a 10 cents per share increase in its forecast profitability for the 2011 financial year, leading to a similar improvement in its forecast Payout.

There is no change to Fonterra’s forecast Milk Price. The updated forecast Payout range before retentions is $8.00-$8.10, which would be a new record for the Co-operative.

At the same time, Fonterra announced a lower opening forecast Payout for the 2011/12 season commencing 1 June 2011, reflecting an outlook for a higher average exchange rate and potentially moderating commodity prices. The opening forecast Payout range before retentions is $7.15-$7.25, including an opening forecast Milk Price of $6.75 per kilogram of milksolids (kgMS) and forecast Distributable Profit range of 40-50 cents per share.

The Co-operative has also set the Fair Value Share (FVS) price for the 2011/12 season at $4.52, the same level as in the current season.

2010/11 forecast Payout range

The updated forecast Payout range for this year combines an unchanged forecast Milk Price of $7.50 per kgMS and a forecast Distributable Profit range of $690-$830 million, equating to 50-60 cents per share – 10 cents higher than the previous forecast in February 2011. The target range for the Dividend (to be paid out of Distributable Profit) is unchanged at 25-30 cents per share.

As a consequence, Fonterra forecasts that a 100 per cent share-backed farmer will earn on average in the range $8.00-$8.10 before retentions (up 10 cents on the previous forecast), and $7.75-$7.80 on a cash basis (unchanged from the previous forecast).

The final Payout will be confirmed when Fonterra announces its annual financial results in late September. If confirmed within the forecast range, it would represent a new record for Fonterra – exceeding the $7.90 (before retentions) and $7.66 (cash basis) achieved in 2007/08.

CEO Andrew Ferrier said the Distributable Profit forecast of $690-$830 million for the 2011 financial year compared with a Distributable Profit of $800 million for 2010.

Mr Ferrier said in spite of the very strong global commodity prices, operating earnings within the Commodities & Ingredients businesses and the Consumer Brands businesses in total were expected to be marginally ahead of 2010. The updated profit forecast also now recognised expected tax benefits associated with projected dividend payments, retentions and one-off items.

Chairman Sir Henry van der Heyden said the forecast range for the 2011 Dividend is unchanged at 25-30 cents per share.

2011/12 Opening Forecast Payout

For the new 2011/12 season and financial year, Fonterra is forecasting a Milk Price of $6.75 per kgMS plus a forecast Distributable Profit range of 40-50 cents per share. This means Fonterra is forecasting that a 100 per cent share-backed farmer will earn on average in the range $7.15-$7.25 before retentions.

Sir Henry said the opening forecast for 2011/12 reflected a realistic outlook by the Board towards global dairy markets over the coming season.

“In the current season, farmers have benefited from sharply higher commodity prices due to improved world demand for dairy products. Commodity prices have been close to record levels.

“Although current market prices and exchange rates would still yield a Milk Price similar to this season’s, recent months have been characterised by a softening in commodity prices and continued strength in the New Zealand dollar. As commodities are mostly sold in US dollars, a higher exchange rate hits the Milk Price. We must also be aware of the potential effect that current high commodity prices may have on dairy market dynamics, as high prices tend to encourage more supply into global markets from a number of countries.”

Despite the 2011/12 forecast Milk Price of $6.75 per kgMS being 10 per cent lower than this season’s current $7.50 forecast, it still represents Fonterra’s highest opening forecast to date, Sir Henry commented.

Mr Ferrier said that although budgets for the 2012 financial year will not be finalised until July, the Distributable Profit range for the 2012 financial year is currently forecast to be in the range of $570-$710 million, equating to 40-50 cents per share. The forecast 2012 Distributable Profit reflects a slight increase in expected underlying business profitability compared with 2011.

Although the Board has yet to forecast a Dividend range for 2012, Mr Ferrier said dividend payments are expected to be made in accordance with the Fonterra dividend policy to pay out 65-75 per cent of underlying profit (adjusted for one-off items and other factors).

“Every Kiwi should welcome today’s forecast. Over the current season, the milk price forecast has increased by 90 cents and according to the NZIER, this will generate some 4,140 full time jobs in the wider economy,” says Lachlan McKenzie, Federated Farmers Dairy chairperson.

“The opening for the 2011/12 season at $6.75 kg/MS is slightly up on this current season and that sends a powerful message about volatility.

“If the 90 cent appreciation in the milk price this season was reversed, then the average farm would have made a loss. This is the reality of our margins and why we caution farmers to run conservative budgets.

Information TheCattleSite News Desk

NEW ZEALAND – Fonterra Set For Record Milk Production – May 17, 2011

NEW ZEALAND – Fonterra and its farmer shareholders are on track to report record production for the 2010/2011 season following some of the best autumn weather conditions in recent years.

Steve Murphy, General Manager Milk Supply, said that with two weeks of the season still to go, production was more than 4 per cent ahead of the same time a year ago, when much of the country was experiencing dry or drought conditions. Fonterra last season collected 1,286 million kilograms of milksolids.

“Exceptionally favourable pasture growth conditions since January mean our farmer shareholders have enjoyed strong production around the country, particularly north of Taupo. This is a real turnaround from earlier in the season when many of our farmers were struggling with a cold and wet spring. This, coupled with an early December drought, depressed production levels dramatically.”

“It was a tough start to the season due to the northern drought. Farmers then had to cope with more drought, floods and snowstorms. But the recent excellent pasture growth has meant herds are now in good condition, which bodes well for calving and the new season’s start.”

Mr Murphy said the additional milk would be welcomed in the market where supply remained tight.

He noted prices for globally traded dairy products, while off their highs of early March, were still at historically high levels.

“This means farmers are on track to enjoy another good season, which will flow through the economy and benefit every New Zealander.”

Fonterra recently reported the highest ever month for exports, with 229,000 tonnes of its dairy products leaving New Zealand shores in March.

Information TheCattleSite News Desk

CHINA – Chinese middle-class helps Fonterra set new export record – 27th Apr 11

The world’s biggest dairy exporter, Fonterra, says demand from aspiring middle-class consumers in Asia – particularly China – has underpinned recorded the cooperative’s record level of monthly exports: 229,000 tonnes in March.

“The real driver for the export record is the ongoing strong demand from China, South East Asia and the Middle East,” said the company’s managing director of trade and operations, Gary Romano.

“In these regions, we are seeing the emergence of the middle-class with more discretionary income and a desire for more nutritious foods,” he said. “Dairy fits the bill”.

The record shipments were part of continued growth in global demand for high quality dairy products from New Zealand.

“Our supply chain team were effectively closing the door on an export container every 2.6 minutes,” Romano said. “That’s equivalent to 560 containers a day”.

“We expect the record month will inject around $1.2 billion into the New Zealand economy,” he said.

In August last year, Fonterra announced that it had set a new annual export record, sending 2.1 million tonnes of product to international markets for the first time in its nine-year history.

The export tonnages from August 2009 to July 2010 were 60,000 tonnes higher than in 2008-2009 and were a factor in New Zealand’s six month run of consecutive trade surpluses.

Milkpowder, butter and cheese all ranked among the leading exports which saw the June trade surplus hit $276 million and the year-to-June surplus in 2010 reach $639 million.

Those gains were also attributed to Asian demand, and Fonterra said at the time that it shipped an average 380 containers a day, with highs of 500 between the peak export months of November and April.

The final payout to farmers for this season’s milkflows will be announced in September, but directors have already said that farmers can expect a record payout in the season due to end next month.

The cooperative has indicated that a surplus of around $8/kg milksolids is likely to result in an average of $900,000 being available for each farmer: its current forecast range for the 2011 season is $7.90-$8.00kg milksolids (before retentions) to farmers, unchanged from the levels announced in late February.

Its 10,500 farmers are expected to each receive between $7.75 kg and $7.80/kg in cash from their milk payment, plus the cooperative’s dividend.

Fonterra’s previous record in 2008 was $7.90/kg (before retentions), the company said. That season, farmers received $7.66 kg in cash.

The 2011 forecast is based on a milk price of $7.50/kg and a distributable profit (surplus) range of $550-$690 million, equivalent to 40c-50c a share, from which Fonterra plans to pay a dividend of 25c-30c a share.

The bonanza payout will be in spite of a tough start to the dairying season with drought, floods and snow storms.

Information NZPA

NEW ZEALAND – Fonterra Must Avoid Human-Cow Milk – April 08, 2011

NEW ZEALAND – Fonterra’s biotech arm ViaLactia must reject human-cow hybrids as unethical, following announcements of Chinese scientific experiments that are likely to have involved unacceptable deformities in animals, according to GE-Free New Zealand.

An unreferenced and scanty report on GE milk containing human genes is filled with errors, and media reports indicate a GE herd of 200 to less than 45. This may indicate a failure rate of over 80 per cent, similar to AgResearch’s transgenic cloning in New Zealand AgResearch, says the group.

The notion of making human-cow milk is also flawed in terms of health-giving properties of mothers’ milk. Milk is adapted for the new born by the mother for her child.Each mother’s milk provides a unique combination of antibodies that are specific to a child’s or animals growth. Human milks contain antibodies that are specially adapted to human immune protection and cows carry totally different types of anti bodies for their calves.

“The transgenic creation of human /cow milk is ill-conceived and cruel to sentient animals.Animals should not pay for man’s arrogance and lack of ethical balance in the application of powerful technologies,” says Claire Bleakley from GE-Free NZ in food and environment.

“The Bio-Ethics Council warned against such abuses with its call for further review, but it has been abolished for its pains.”

Fonterra is setting up five modern day dairy farms in China.These farms could be up to 10,000 cows housed in indoor stalls with little regulation on animal welfare grounds. This is as potentially damaging as the ‘melamine ‘ disaster and could further deepen the terrible reputation for safety that San Lu in China already brought Fonterra.

The question needs to be asked if our leading market Milk brand that is supported by the New Zealand farmer shareholders has any involvement in this transgenic Chinese platform.Were they instrumental in providing New Zealand cows for this terrible experiment?Fonterra is red listed in the True Food guide in Australia .Are they undercutting the New Zealand farmer shareholders who supply it with GE Free, grass fed milk?

Information TheCattleSite News Desk