Latest / Early Edition with Ryan Bridge / Richard McIntyre: Federated Farmers Dairy Chair on Fonterra's interim results, the dairy sector

Transcript

Richard McIntyre: Federated Farmers Dairy Chair on Fonterra's interim results, the dairy sector · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: It has been a brilliant week for our dairy farmers.
• 0:02
  Speaker 1: Fonterra has delivered a bumper first half result with net
• 0:04
  Speaker 1: profit up to seven hundred and twenty nine million dollars,
• 0:07
  Speaker 1: a dividend of twenty two cents a share will be paid,
• 0:09
  Speaker 1: and the midpoint milk price is still at ten bucks
• 0:11
  Speaker 1: a kilo. Chair Federated Farmers Dairy Industry Group, Richard McIntyre
• 0:15
  Speaker 1: is with us. Good morning, Richard, good morning. So is
• 0:19
  Speaker 1: the mood the vibe on the farm shifting to something
• 0:22
  Speaker 1: a little bit more positive?
• 0:25
  Speaker 2: Yeah, farmers are, or dairy farmers are a lot more
• 0:27
  Speaker 2: optimistic at the moment. You know. Obviously we've got a
• 0:30
  Speaker 2: few that are going through a drought at the moment
• 0:32
  Speaker 2: in the Northoland, but a lot of it rain over
• 0:34
  Speaker 2: the last three days, which is sitting void spirits a
• 0:37
  Speaker 2: little bit in that respect. But look, you know, a
• 0:39
  Speaker 2: ten to a milk price is great. You know. The
• 0:41
  Speaker 2: fact that's becoming more and more certain is really really positive.
• 0:45
  Speaker 2: And we're hearing a lot of talk about attend to
• 0:46
  Speaker 2: a milk price for next season as well, which is awesome.
• 0:50
  Speaker 2: So the break even milk price is sitting at around
• 0:52
  Speaker 2: eight dollars fifty at the moment, so it's still really high,
• 0:54
  Speaker 2: but there's still a reasonable margin there for the average farmer.
• 1:00
  Speaker 2: A lot of talking about, you know, paying down some debt,
• 1:02
  Speaker 2: you know, a lot of accumulated some debt over the
• 1:04
  Speaker 2: last few years to paying that down, some deferred maintenance
• 1:08
  Speaker 2: or some capital projects. And probably you know, for the
• 1:11
  Speaker 2: first time in quite a while, I'm hearing a lot
• 1:13
  Speaker 2: of farmers starting to ask but a few questions and
• 1:16
  Speaker 2: talk about what they could or should invest in their
• 1:19
  Speaker 2: farm that will future proof it for the next ten
• 1:21
  Speaker 2: to twenty years. So you know, that is awesome.
• 1:24
  Speaker 1: What is the answer to that?
• 1:26
  Speaker 2: Look, it really depends on the farm and this situation.
• 1:29
  Speaker 2: You know, there are a lot of improvements that can
• 1:32
  Speaker 2: be made to I guess, focus on productivity and production.
• 1:36
  Speaker 2: There's there are approvements that can be made to reduce
• 1:39
  Speaker 2: greenhouse gas emissions or improved water quality, and it depends
• 1:42
  Speaker 2: on I guess the starting point for those farms and
• 1:45
  Speaker 2: whether low hanging fruit is first and foremost.
• 1:48
  Speaker 1: This follows forecast this week of back to back good seasons,
• 1:50
  Speaker 1: which is quite unusual, isn't it? Can it last?
• 1:54
  Speaker 2: Well, that's a really good question. So it is quite
• 1:57
  Speaker 2: rare to have a couple of good seasons in a row.
• 2:00
  Speaker 2: So often when you have a really good milk prices
• 2:02
  Speaker 2: because international milk prices are really high. And although we
• 2:07
  Speaker 2: although we produce a large proportion of the milk that
• 2:10
  Speaker 2: is traded across borders, we only produce a small proportion
• 2:14
  Speaker 2: of the milk that is produced in the wild, and
• 2:16
  Speaker 2: so a lot of the other producers in the world
• 2:18
  Speaker 2: actually just ramp up production when prices are high, and
• 2:21
  Speaker 2: often they overshoot a little bit and oversupply the following
• 2:24
  Speaker 2: year at the milk price jobs, so we've always going
• 2:26
  Speaker 2: to be really aware of that. You know, these productions
• 2:28
  Speaker 2: for next year great, but there is a chance that
• 2:31
  Speaker 2: the milk price might drop still and.
• 2:33
  Speaker 1: You're all concerned about the global economic instability at the moment.
• 2:40
  Speaker 2: Look, I think everyone's a little bit worried about where
• 2:43
  Speaker 2: that might go this and there a little bit of uncertainty.
• 2:46
  Speaker 2: But you know the other side of it is in
• 2:48
  Speaker 2: New Zealand produces really good, safe food and you know
• 2:53
  Speaker 2: it's well with grass feed. It's sought out throughout the world,
• 2:57
  Speaker 2: and so you know, we typically get a bit of
• 2:59
  Speaker 2: a premium for that. So in any sort of trade
• 3:01
  Speaker 2: wards or anything like that, you know, typically we'll still
• 3:05
  Speaker 2: have people that we want to buy, all countries that
• 3:07
  Speaker 2: we want to buy milk product. So last time, you know,
• 3:10
  Speaker 2: Trump gotton, we had all that talk about tariffs, etc.
• 3:15
  Speaker 2: What really happened was that Mexico decided that they really
• 3:19
  Speaker 2: wanted our milk products over over America's and we set
• 3:23
  Speaker 2: and sold a hold of milk fare. So that's yeah, yeah,
• 3:27
  Speaker 2: we create opportunities as well.
• 3:29
  Speaker 1: Thank you so much for your time, Richard McIntyre. For
• 3:32
  Speaker 1: more Familily Edition with Ryan Bridge, listen live to news talks.
• 3:36
  Speaker 1: It'd be from five am weekdays
• 3:38
  Speaker 2: Or follow the podcast on iHeartRadio