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Campbell Parker: DairyNZ CEO on Fonterra's positive annual result · Best of Business

• 0:09
  Speaker 1: You're listening to a So 2.6 billion annual profit.
• 0:18
  Speaker 2: This is Fonterra. 1.2 billion coming from the sale of
• 0:21
  Speaker 2: the mainland brands to the French. 20 billion being paid
• 0:24
  Speaker 2: out this year. Not too worried about El Nino yet.
• 0:28
  Speaker 3: They had a really good autumn, so there's quite a
• 0:29
  Speaker 3: bit of feed on farm that they can use if
• 0:32
  Speaker 3: we get a bit drier in the summer. And we've also,
• 0:35
  Speaker 3: as a cooperative, been through many droughts before in terms
• 0:37
  Speaker 3: of understanding how we need to adjust our plans.
• 0:40
  Speaker 2: Campbell Parker's with us, Dairy NZ CEO this morning.
• 0:42
  Speaker 3: G'day, Campbell. Morning, Ron.
• 0:44
  Speaker 2: You like the sound of that?
• 0:47
  Speaker 4: What's that? Good result. Always good. Yeah, always good for
• 0:50
  Speaker 4: farmers and also good for the economy.
• 0:52
  Speaker 2: What about the return on capital? This is Judy who
• 0:55
  Speaker 2: likes to text our program. Good morning, Judy. Judy says
• 0:58
  Speaker 2: return on capital 14.2%, way above the target, possibly one of,
• 1:02
  Speaker 2: if not the best return on capital of all the
• 1:05
  Speaker 2: large global milk cooperatives or companies.
• 1:09
  Speaker 4: Yeah, look, I think the results, you know, reflected, you know,
• 1:12
  Speaker 4: strong strategy, but also execution. I mean, I go back
• 1:15
  Speaker 4: to earlier this year, you know, moving product overseas was
• 1:18
  Speaker 4: pretty difficult with some of the challenges around. So I
• 1:21
  Speaker 4: think they've delivered a really strong result. And I think
• 1:23
  Speaker 4: it's positive for the reinvestment into, you know, continuing to
• 1:26
  Speaker 4: extract value for farmers.
• 1:28
  Speaker 2: The strong price that we have seen, and sure, it
• 1:30
  Speaker 2: has dipped a bit, but it's coming back. How long
• 1:33
  Speaker 2: does the strong price last?
• 1:36
  Speaker 4: I'm not an economist, Ryan, but if you look through
• 1:38
  Speaker 4: the cycle, there's certainly been some structural changes in demand
• 1:41
  Speaker 4: for things like protein, the trends around GLP-1 drugs globally.
• 1:48
  Speaker 4: So the demand is strong. When I talk to the
• 1:50
  Speaker 4: people at Fonterra, demand for products is strong, particularly across proteins,
• 1:53
  Speaker 4: but also across fats. But again, for farmers, we've been
• 1:58
  Speaker 4: there before where the industry can be cyclical. So You know,
• 2:01
  Speaker 4: farmers have got good, strong balance sheets at the moment.
• 2:04
  Speaker 4: I think the key thing is to keep focused on
• 2:06
  Speaker 4: doing what they do well and keep control of costs
• 2:08
  Speaker 4: because those margins are certainly getting tighter as well.
• 2:12
  Speaker 2: Campbell, always good to chat. Campbell Parker, Dairy NZ CEO.