Jamie Mackay: The Country host on Fonterra lowering their farmgate milk prices

Fonterra's forewarning farmers falling global dairy prices could hit their bottom lines.

The dairy co-op recently cut its seasonal farmgate milk payout midpoint forecast - from $10 to $9.50.

It paid out $10.16 last season.

The Country's Jamie Mackay explained further.

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Episode Transcript

Speaker 1 (00:09):
You're listening to a podcast from news Talk zed be
follow this and our wide range of podcasts now on iHeartRadio.
Jamie McKay hosts of the countries of That's Hello, Jamie.

Speaker 2 (00:20):
Cat here and I can tell you it'll be some
farmers in Canterbury who might be doing some assaults at
the moment. It means the demise of ECAM. They haven't
exactly been farmer friendly. And I must say, as someone
who's domiciled in Dunedin, what the hell the Otago Regional
Council is doing running the buses that chug around Dunedin
mostly empty, I might add, instead of thenedon city counts

(00:43):
or bog You know, it begs It begs the question
who should actually be running them? And I think I
just hope they don't replace this bureaucracy with a worse one.
But anyhow, a farewell to the regional council. Shane Jones
said he do it, and yes, and.

Speaker 1 (01:00):
Don't let the door hit you on the way out.
We say to them, yeah, okay, Fonterra. So this was expected,
wasn't it.

Speaker 2 (01:08):
Yep, Farming's worst kept secret is out. It's out a
week early. They were going to come out with their
quarterly update early next week. But I spoke to Myles
Hurrale on my show today and he said, look, we
did the numbers over the weekend. If you've got the information,
we don't know you're sitting on it, we mars will
get out there and tell the farmers. So that midpoint
is now nine dollars fifty. The range is nine to ten.

(01:28):
It still begs the question why they started And I
threw this at Miles and he ducked for cover a
wee bit. But they started the season at eight dollars
to eleven and logic would suggest the midpoint there is
nine to fifty, but they chose a mid point of ten,
remembering they paid ten dollars sixteen last season. Also, interestingly,
today's cut is the first mid season cut Fonterra has

(01:52):
made to its forecasts since twenty three. And that's because
we've had a rising plane of price as whole milk powder.
As we all know, we've had seven drops in a row.
It's twenty percent off its peak back in May. The
other problem is when the go up, the taps get
turned around turned on. Not only here in New Zealand,

(02:13):
New Zealand farmers are about four percent up on production,
but also right around the world where they divert, for
instance in America cheap grain into milk production. Look, as
we said, we knew this was coming. A and Z
cut its forecast to nine sixty five. Recently the B
and Z went to nine to fifty. No surprise at all.
It does affect other farmers supplying other dairy companies as well, Heather,

(02:37):
because the likes of sin Lay Milk and Westland milk
products basically peg what they paid the farmers to the
Fonterra milk price. So if I can stay at nine
to fifty, well, I think we'll still do. Okay. The
warrior is it might sneak below that.

Speaker 1 (02:50):
Yeah, yeah, fair enough.

Speaker 2 (02:52):
What's going with McDonald's and the price of beef. Well,
I just came across some numbers and I think I've
got a credit are n Z for this story about
McDonald's and how effectively important it is for New Zealand
and especially the beef industry. Percent of their menu and
the one hundred and seventy restaurants around the country is

(03:13):
sourced from local farms. That's good. It's spending two hundred
and thirty five million here in New Zealand on local
produce beef cheese buns, but it also exports them. So
last year, the American owned franchise or subsidiary used six
thousand tons of locally sauced beef for sale here domestically,

(03:35):
but it exported thirty thousand tons of it, making up
wait for this, ten percent of New Zealand's total beef
exports are responsible for what McDonald's are doing. They serve
here's an interesting stat for your heather, seventy million people
a day plus Donald Trump, and they use two percent
of the world's beef. And the burgers or the beef's

(03:56):
twenty percent more expensive than it was at the start
of the year. If you want to know what that
means for your cheeseburger, the patty that goes inside your
cheeseburger is now ten cents more expensive of them it
was at the start of the year.

Speaker 1 (04:10):
That it all adds up.

Speaker 2 (04:11):
I suppose, Hey, how rich is Sue's redmain What do
you think about that? Oh right, I was just about
to go and grab dinner. He hither. I thought we
were over, But Sue's red mat was Sue's Redmain. I'm
sorry for four million dollars worth of property.

Speaker 1 (04:25):
That's not doing too bad. It's a life goal, isn't it.

Speaker 2 (04:29):
Yeah, but we've got to we bit careful with this one.
The Herald did a report on this one over the
weekend or something like that. So Sus is topping the
rich list. Christopher Luckson's second, Barbara Krueger, another farmer, is
in third place, and I beg I threw the question
out there as Parliament returning to the sixties, the domain
for rich farmers. Well, I don't think it really is,

(04:49):
because Andrew Hoggard was also up on the rich list,
but he said when they worked out the value of
his farm they forgot to take off the half that
his mum and dad owed, and they also forgot to
take off all the money he owed to the bank.
I don't know SUS's personal farming operation, and it's a
very good one. They do some great work where they're farming.

(05:09):
They're a very good farming operation. They may well be
debt free and have a farm worth eighteen million, but
I suspect that may not be the case. All we
can say is that Hogart is richer than Winston Winston's
eleventh are on the list, Willie Jackson's the Top Labor
Guy at seventeenth, and surprise, surprise, no Green or Capati

(05:30):
Mari MPs make the top twenty.

Speaker 1 (05:32):
Doesn't surprise anyone. Jamie, thanks very much, really appreciate it.
Jamie mckaie, Host of the Country. For more from News Talks,
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