Jamie Mackay: The Country host on Fonterra's cautious optimism about the farmgate milk price payout

Fonterra is being cautiously upbeat about the future.

The dairy co-op is forecasting a $10 farmgate milk price payout for the current season, and an earnings range of 65 to 75 cents a share.

The Country's Jamie Mackay explains what this means for the market.

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Episode Transcript

Speaker 1 (00:09):
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Speaker 2 (00:16):
Jamie McKay hosts of the Countries with Us Jmeie got
I hear that. How good is Fonterra?

Speaker 3 (00:22):
Pretty damn good, especially if you're a Fonterra farmer. Shareholders
about ten thousand of them around the country, and I
reckon they'll be turning up in Hamilton Heather in a
couple of weeks time and possibly spending up large, especially
when you consider the new tax incentive scheme put in
place in the budget by the government. But getting back
to Fonterra today, look, ten dollars is locked and loaded.

(00:44):
That's the worst world's worst secret for this season, which
we're going to finish on what Saturday night, Sunday morning.
The really interesting number and the most eagerly awaited number
from their Q three update today was the forecast opening
price for the twenty five to twenty sixth season, and
they came in at ten dollars, which was probably I
think above market expectation. Their range is quite wide. They've

(01:07):
gone eight dollars to eleven dollars. Midpoint of that would
obviously be nine to fifty. But Miles Hurrell saying, look,
we see really positive signs despite everything that's happening in
the world geo politically out there. So if dairy farmers
can get ten dollars two years in a row, that's
great for them. It's great for the rural economy, and
it's great for the New Zealand's economy because they are

(01:28):
our biggest business. The other numbers out there, Heather, the dividend,
I mean, they get the milk price that's ten bucks.
What will the dividend be while judging on what Miles
Hurrell was saying on my show that it could be
up around fifty cents. And I looked at the share
price today, Heather, it closed at four dollars sixty four.
So if you get a fifty cent yield on that,

(01:49):
that's a fifty per cent dividend. Should I say that's
an eleven percent yield? Really interesting? And the other one
out there that I threw at Miles Hurrell and he
kind of duckted to cover a wee bit. Wouldn't put
a number on it. Obviously it's too early. But when
they flag off the consumer brand's business, that's going to be.
It looks like quite a whiny for Fonterra shareholders. They

(02:10):
might get back as much as two dollars per share.
So at four dollars sixty four, take away two dollars
the shares. Don't know them much, but do remember, Heather,
a few years ago they were at six bucks. So
some people who bought on a high I have got
a wee bit of catching up today.

Speaker 2 (02:25):
Yeah, fair enough. What are you buying at Peel Days?

Speaker 3 (02:29):
Well nothing really. I was going to say a Queen
Street farmer, Heather, but that's not quite right. I'm a
George Street farmer here in Dunedin. So now look, I
literally turn up there, do my show, do my interviews,
do the client stuff, and then walk out. The only
thing I spend in Hamilton is probably in a bar

(02:50):
later on the evening. It's a very social event.

Speaker 2 (02:53):
How good, Jamie, Thank you as always, it's wonderful to
talk to you. Go well, It's Jamie McKay, Host of
the Country.

Speaker 1 (02:58):
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