September 1, 2026 • 5 mins
The Managing Director of Co-operative Affairs at Fonterra discusses last night's GDT auction.
See omnystudio.com/listener for privacy information.
Listen
Watch
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Time to look at the latest GDT, the Global Dairy
Trade Auction, overnight. And to discuss this, Managing Director of
Co-op Affairs, Fonterra, Matt Bolger.
Speaker 2 (00:10):
Afternoon, Matt. Not too much movement there. G'day, Hamish.
Speaker 3 (00:15):
Yeah, it was sort of a mixed auction, actually. I mean,
the headline is saying it's basically flat. But within that,
there were a few different movers. We saw whole milk powder,
you know, pretty much flat. things like cheese, which we
don't often talk about as much, but that dropped back
a bit. And then on the other hand, skim milk powder,
a bigger product, had really good gains. So it all
(00:36):
sort of averaged out at about flat, which is, you know,
for this time of the season, when we are coming
into selling the peak, it is not too bad a result.
Speaker 1 (00:44):
Yeah, so what drives the demand for the extra volume
in the skim milk industry?
Speaker 3 (00:50):
Yeah, so I guess like everything, it's a bit of
a supply-demand picture. If you take something like skim milk
powder up over 5%, inventories are reasonably healthy, but there's
just very good demand for dairy proteins as an ingredient.
It's lots of different products, so that's good. Something like cheese,
it's a little bit softer. There's a lot of impact
(01:12):
from Europe and the US, and so in the US,
cheese demand has pulled back a bit. People are eating
out less in the States now, But actually, interestingly, returns
from whey protein are very good. And often when you
make cheese, you get whey on the side. And so
that's driving people to actually still produce cheese, even though
demand has softened a bit. So it's a range of
(01:32):
different factors that sort of play into a result like that.
Speaker 1 (01:35):
In terms of a breakdown on what influences the farm
gate price, I mean, I guess whole milk powder remains
the biggest influencer.
Speaker 3 (01:44):
Yeah, yeah, it does. No, whole milk powder is the
big one. And I guess on Holmuk powder, we did
see really good participation in the auction overnight from China
in particular. But we also have a lot of sales
going into Southeast Asia and a bit into the Middle
East too. In China, they're starting to build inventories to
get ready for the Lunar New Year, the Chinese New Year,
early next year. So you start seeing some of that
(02:07):
buying behaviour come through too.
Speaker 2 (02:09):
Yeah, OK.
Speaker 1 (02:10):
Look, in terms of And outlook and longevity and payout.
I mean, there seems to be things seem to have
that sort of, you know, I know global pressures can
can change things quickly, but there seems.
Speaker 2 (02:24):
To be a sort of a pretty steady as she
goes pattern.
Speaker 3 (02:28):
Yeah, after the last few auctions, it's probably unusually stable
for dairy pricing. Yeah, look, we've got a very positive
view in the long term. But of course, if you
go out a number of years, just the core supply-demand dynamics,
dairy is recognized for fantastic nutrition and flavor and all
of those things. and there's probably more constraints on growth
(02:51):
around the world in the longer term. But, of course,
that won't be a straight line, and we think things
will bump around quite a lot if you take a five-
or ten-year view as you come into this season. Things
are looking good now, and, of course, every week we're
contracting more of the book, and that helps, you know,
gives us more confidence and payout for this year. But
(03:11):
I think two factors are being taken into account, which
is El Nino, You know, people are starting to price
in the risk of a drought in New Zealand and
other places or the potential of a drought after Christmas.
And then you're also seeing the heat wave in Europe.
So Europe's milk has grown a lot, but that growth
is really starting to button off quite a lot now
(03:32):
with extreme heat over there with European summer. So those
two things are starting to factor into price sentiments as well.
Speaker 1 (03:39):
Yeah. Matt, it's a worldwide trend to use these fandangled
weight loss injections. It's also something that we're seeing a
lot of promoting of what is the right proteins and
the right foods to have with these.
Speaker 2 (03:53):
I mean, is that sort of an angle that's been
worked with milk?
Speaker 3 (03:58):
Yeah, absolutely. Yeah, look, I forget the latest percentage of
Americans that are on the GLP-1 drugs and they're being
used around the world now. Interestingly, I've talked about this
one a little bit. If you're in the business of
selling food and people are eating less, you might think
that that's not a great thing. But what we're seeing
(04:19):
is that when people reduce the calories that they take
in every day, they also start focusing less very much
on the quality of the food that they're getting because
they just need to maintain muscle mass and all those things.
And dairy, particularly on the protein side, dairy is just
absolutely the world-leading protein. And so people start taking, I guess,
(04:40):
paying more attention to what they're eating. They probably look
more carefully at having more protein. And then after that,
it's a quick jump to say, well, what's the highest
quality protein? and they get to dairy. And so, interestingly,
those GLP-1 weight loss drugs have actually been very, very
good for dairy, and it's been a good part of
our business, particularly in places like the US and Europe.
Speaker 2 (05:02):
Yep. Okay.
Speaker 1 (05:03):
Finally, quick update on the forecast for financial year 26 earnings.
Speaker 2 (05:08):
Yep.
Speaker 3 (05:09):
Yeah, so coming out this morning, we've had an earnings
range of $ 0. 60 to $ 0. 70 per share, which is reasonably good.
And we've just come out this morning saying as we
get closer to closing the books out, we expect the
earnings to be at the top end of that range.
So we'll be out on September 24th with the results
for the last season, the season gone. And I guess,
(05:30):
you know, the stage we're seeing it being a pretty
good result.
Speaker 2 (05:34):
Matt Bolger, thanks very much for joining us on The Country. Thanks, Hamish.
Time to look at the latest GDT, the Global Dairy
Trade Auction, overnight. And to discuss this, Managing Director of
Co-op Affairs, Fonterra, Matt Bolger.
Speaker 2 (00:10):
Afternoon, Matt. Not too much movement there. G'day, Hamish.
Speaker 3 (00:15):
Yeah, it was sort of a mixed auction, actually. I mean,
the headline is saying it's basically flat. But within that,
there were a few different movers. We saw whole milk powder,
you know, pretty much flat. things like cheese, which we
don't often talk about as much, but that dropped back
a bit. And then on the other hand, skim milk powder,
a bigger product, had really good gains. So it all
(00:36):
sort of averaged out at about flat, which is, you know,
for this time of the season, when we are coming
into selling the peak, it is not too bad a result.
Speaker 1 (00:44):
Yeah, so what drives the demand for the extra volume
in the skim milk industry?
Speaker 3 (00:50):
Yeah, so I guess like everything, it's a bit of
a supply-demand picture. If you take something like skim milk
powder up over 5%, inventories are reasonably healthy, but there's
just very good demand for dairy proteins as an ingredient.
It's lots of different products, so that's good. Something like cheese,
it's a little bit softer. There's a lot of impact
(01:12):
from Europe and the US, and so in the US,
cheese demand has pulled back a bit. People are eating
out less in the States now, But actually, interestingly, returns
from whey protein are very good. And often when you
make cheese, you get whey on the side. And so
that's driving people to actually still produce cheese, even though
demand has softened a bit. So it's a range of
(01:32):
different factors that sort of play into a result like that.
Speaker 1 (01:35):
In terms of a breakdown on what influences the farm
gate price, I mean, I guess whole milk powder remains
the biggest influencer.
Speaker 3 (01:44):
Yeah, yeah, it does. No, whole milk powder is the
big one. And I guess on Holmuk powder, we did
see really good participation in the auction overnight from China
in particular. But we also have a lot of sales
going into Southeast Asia and a bit into the Middle
East too. In China, they're starting to build inventories to
get ready for the Lunar New Year, the Chinese New Year,
early next year. So you start seeing some of that
(02:07):
buying behaviour come through too.
Speaker 2 (02:09):
Yeah, OK.
Speaker 1 (02:10):
Look, in terms of And outlook and longevity and payout.
I mean, there seems to be things seem to have
that sort of, you know, I know global pressures can
can change things quickly, but there seems.
Speaker 2 (02:24):
To be a sort of a pretty steady as she
goes pattern.
Speaker 3 (02:28):
Yeah, after the last few auctions, it's probably unusually stable
for dairy pricing. Yeah, look, we've got a very positive
view in the long term. But of course, if you
go out a number of years, just the core supply-demand dynamics,
dairy is recognized for fantastic nutrition and flavor and all
of those things. and there's probably more constraints on growth
(02:51):
around the world in the longer term. But, of course,
that won't be a straight line, and we think things
will bump around quite a lot if you take a five-
or ten-year view as you come into this season. Things
are looking good now, and, of course, every week we're
contracting more of the book, and that helps, you know,
gives us more confidence and payout for this year. But
(03:11):
I think two factors are being taken into account, which
is El Nino, You know, people are starting to price
in the risk of a drought in New Zealand and
other places or the potential of a drought after Christmas.
And then you're also seeing the heat wave in Europe.
So Europe's milk has grown a lot, but that growth
is really starting to button off quite a lot now
(03:32):
with extreme heat over there with European summer. So those
two things are starting to factor into price sentiments as well.
Speaker 1 (03:39):
Yeah. Matt, it's a worldwide trend to use these fandangled
weight loss injections. It's also something that we're seeing a
lot of promoting of what is the right proteins and
the right foods to have with these.
Speaker 2 (03:53):
I mean, is that sort of an angle that's been
worked with milk?
Speaker 3 (03:58):
Yeah, absolutely. Yeah, look, I forget the latest percentage of
Americans that are on the GLP-1 drugs and they're being
used around the world now. Interestingly, I've talked about this
one a little bit. If you're in the business of
selling food and people are eating less, you might think
that that's not a great thing. But what we're seeing
(04:19):
is that when people reduce the calories that they take
in every day, they also start focusing less very much
on the quality of the food that they're getting because
they just need to maintain muscle mass and all those things.
And dairy, particularly on the protein side, dairy is just
absolutely the world-leading protein. And so people start taking, I guess,
(04:40):
paying more attention to what they're eating. They probably look
more carefully at having more protein. And then after that,
it's a quick jump to say, well, what's the highest
quality protein? and they get to dairy. And so, interestingly,
those GLP-1 weight loss drugs have actually been very, very
good for dairy, and it's been a good part of
our business, particularly in places like the US and Europe.
Speaker 2 (05:02):
Yep. Okay.
Speaker 1 (05:03):
Finally, quick update on the forecast for financial year 26 earnings.
Speaker 2 (05:08):
Yep.
Speaker 3 (05:09):
Yeah, so coming out this morning, we've had an earnings
range of $ 0. 60 to $ 0. 70 per share, which is reasonably good.
And we've just come out this morning saying as we
get closer to closing the books out, we expect the
earnings to be at the top end of that range.
So we'll be out on September 24th with the results
for the last season, the season gone. And I guess,
(05:30):
you know, the stage we're seeing it being a pretty
good result.
Speaker 2 (05:34):
Matt Bolger, thanks very much for joining us on The Country. Thanks, Hamish.
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
The Joe Rogan Experience
The official podcast of comedian Joe Rogan.