The Country 03/06/26: Matt Bolger talks to Jamie Mackay

From the PM to a former PM's son, we ask Fonterra's MD for Co-op Affairs about the first GDT Auction of the new dairy season and whether he's read Barry Soper's book about his late father, Jim. 

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Episode Transcript

Speaker 1 (00:00):
Matt Bolger is the managing director of co op Affairs
for Fonterra. We're going to have a look at the
first auction of the new season, down zero point six percent,
the cream portfolio, starting the season well and skim feeling
the ill effects of the US unwind. Mike McIntyre's words
not mine. But before we do, Matt Bulger, you're the

(00:22):
son of the late Jim Bolger Prime Minister. Have you
read Barry Soaper's new book yet? No?

Speaker 2 (00:27):
I haven't. Actually Jamie and Gidega to talk to you now.
A friend dropped it off with me last week, actually
started sitting on the bedside cabinet. So yeah, I'll look
forward to getting into that one.

Speaker 1 (00:36):
Well, there was a story in there, and I haven't
read all the Jim Bolger chapter, but a story about
an election night party in Tekaweddi that went all night
and the Bulger children were all there, all eight or
nine of you, or however many of them was, and
you were very musical and you played instruments and it
was a jolly old sing song till the sun came up?
Can you remember that?

Speaker 2 (00:58):
I was let some of those parties was fairly young,
so I probably wasn't there until the sun came up.
But no, that does sound like how a few nights
are a few nights when so we've always always enjoyed
getting together with the family.

Speaker 1 (01:09):
Just we better talk some dairy or you and I
will both get sacked. But where do you sit in
the pecking order of the Bulger clan because there was
a fair few of you, Well, there are a fair
few of you.

Speaker 2 (01:18):
Yeah, yeah, nine of us, nine of us in the family,
nine number eight, so never tailed.

Speaker 1 (01:24):
So what is it about these Catholic prime minister families?
The English is there was ten or a dozen of them.
But anyhow, we better get onto the GDT auction? Was
this pretty much as expected?

Speaker 2 (01:35):
Matt Bulger wells, I say recently they're hard auctions to
pick at this stage. But again it's down slightly but
relatively flat. And when you look at the big macro factors,
New Zealand's up in milk production US and Europe, are
you know, three four four and a half percent in
the last three or four months in all that demand,

(01:55):
all that extra supplies still being consumed and bought with
the relatively flat results. So interesting last night's Southeast Asia
actually came through as the strongest buyer of product. Middle
East is still buying, China is still buying, but Southeast
Asia was a big buyer last night.

Speaker 1 (02:11):
So just on the Middle East, how much trouble you
are you having getting the stuff there.

Speaker 2 (02:17):
It's challenging, but we are still landing product. In credit
to the team, the supply chain folks in Katahi who
were making that happen. So all of the product we
had more than thirty thousand tons on the water in
the Straits, were nearby when the conflict broke out. All
of that's being landed has got to its customers and
we're continuing to ship product and then support our customers

(02:39):
up there, which is good. So things are taking longer.
In a nutshell, we might be going into a smaller port,
we might be him to truck over land, but we're
still getting product and to support those customers.

Speaker 1 (02:49):
So, as I said, the cream portfolio, the fat starting
the season well, A skim milk and whole milk powder
a down, whole milk powder down two point two percent,
skim milk powder down three percent. I thought skim was
where it's at at the moment because everyone wanted those
products because of the protein boom.

Speaker 2 (03:08):
Yeah, it is interesting. I think protein is still a
fantastic I guess it's got a fantastic brand at the moment.
And you know, you've got to be careful not to
talk about that as if it's a fair or a trend.
It's because it's a great product. It's great for your health,
great for your your muscles and all the rest of it.
So of course, when you've got milk growth like you've

(03:29):
got out of the US, because US is probably leading
the charge on protein demand and you've got that supply
coming on, you can get a few bumps around that.
I wouldn't say that we're concerned about the long term
outbook for protein. They're really good to see the fats too,
I mean, but are a aimf trading its significant premiums
to US and European prices. And that's positive as well.
And I guess to have both of those large product

(03:50):
streams going well as great for New zealandairy farmers.

Speaker 1 (03:54):
We've talked about the milk volume for the season just
finished up about four percent. We're staring down the back
and I don't want to be the harbinger of get
the word right of doom on this one. But we're
staring down the barrel. It would appear of a super
ol Nino, which is going to mean dry conditions for
a good portion of the country. Albeit those portions of

(04:16):
the country do have irrigation, but you probably never catch
up on what Mother nature doesn't always deliver. Are you
predicting perhaps a drop and milk volume this year off
the back of our nino or will irrigation fill in
the missing pieces?

Speaker 2 (04:31):
Look, we think it's more likely to be steady because
there are some forces up and some down, and of
course a lot of this does tie into how prices go.
So you know, I'll just emphasize that we've come out
with a pretty wide range for next year because it
is very early rare only just starting to contract out
next season. That will affect prices, that'll affect how farmers
are thinking about things like supplementary feed and all the rest. So, look,

(04:54):
we think it's more likely to be steady on this year,
of course, which was up a lot on last year. Interestingly,
when you look at things like the Middle East, there's
cost inflation and certainly that's going to be hard on
farmers here and on all new Zealanders actually, but some
of those other large dairy producing regions like the United
States and Europe, their higher input systems than US used

(05:17):
more fuel, more fertilizer, and so that matter might actually
tape off some of their supply as well.

Speaker 1 (05:23):
Just to finish on And this may not be your department.
Do you do you have anything to do with the
hedging department, the currency hedging department? Are you going to
duct the cover on this one?

Speaker 2 (05:32):
Mac Bolt, I'm heavy to have a crack, but I
wouldn't say I'm a currency No, No.

Speaker 1 (05:37):
I'm just picking up on Mike McIntire's commentary from Jarden.
He said Fonterra noted that just over half of its
US dollar exposure remains unhedged, meaning the final milk price
will be sensitive to where that New Zealand US dollar settles.
And that's a bit of a pig and a poke,
isn't it. We don't know where it's going to settle
due to what's happening in the US.

Speaker 2 (05:59):
Only that one might make him tire. And I'll get
to Andrew Murray when I see him tomorrow and see
where we're at.

Speaker 1 (06:05):
You're happy to be the MP for Twanga and the
son of a former Prime Minister, A Matt Bolger. Thanks
for some of your time and thanks for sharing some
stories about your dad.

Speaker 2 (06:15):
Good on you all right. Thanks Tomy