The Country 12/06/25: Miles Hurrell talks to Jamie Mackay

Fonterra's chief executive commented on the dairy numbers in MPI's Situation and Outlook for Primary Industries report. Plus, will Trump’s tariffs affect dairy? Also, the elephant in the room - dairy conversions.

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Episode Transcript

Speaker 1 (00:00):
Well, let's talk about dairy. We'll bring him up to
the podium. Here at Mystery Creek, day two, sun shining
out there by the way. If you're wondering whether to
turn up, and this man is, of course the chief
executive of Fonterra, I'm going to ask you to start with, Miles,
how did you How did you get to Mystery Creek
this morning? Did you walk across the Whitecaddow River because

(00:22):
it appears to me that you're walking on water at
the moment. There you go. How's that for an opening show?

Speaker 2 (00:26):
Good afternoon, Jamie, looks great to be here. No, I
drove here like everyone else, put up the traffic, but
I was here early this morning. We hosted the Prime Minister,
actually our team, which is great.

Speaker 1 (00:36):
So let's have a look at these numbers. Derry export
revenue lifting sixteen percent to reach a record twenty seven billion.
We've been talking, we talked to Ray about doubling export
or primary sector export income in the next decade. We're
going to have to go We're going to have to
improve things a week. But how much can Darry do well?

Speaker 2 (00:57):
I think what you've seen in the last two or
three years of particular, is it the dema for New
Zealand protein. New Zealand dairy continues to grow, and at
the same time, you've seen a retrenchment from some of
the markets. We see Europe not not exportent as much
as they once did. We've seen North America slow down
on the back of probably decent, decent beef prices actually
from a so therefore, from a dairy perspective, we've not
seen a lot of milk out of North America. So

(01:19):
that leaves that the market and a pretty good state
from our perspective. We've seen China re emerge from a
from a demand perspective, and they're nowhere near back to
where they were in twenty twenty three. So I think
you see China pick up to where they were with
that supply not coming through at the rates that we'd
seen previously. I think that the outlook's very good for dairy.

Speaker 1 (01:38):
Can I ask you about Trump's tariffs because I know
that with the red meat industry, particularly with grinding beef
heading into the US, the Americans just seem to be happy. Well,
they haven't got much choice, They're just paying the ten percent,
and it's the customer over there that's paying. What about
the dairy industry.

Speaker 2 (01:54):
Yeah, very much the same story. You know, at a
macro level, no one likes to see tariffs put on
their products. And you know, we're certainly advocates of free
trade in this part of the world. But at the
end of the day, if there's a ten percent tariff
that goes on all products from all markets, we're all
back to a level playing field, and therefore we can
manage that. And I think for the last couple of
months our team have done a pretty good job that said.

(02:15):
You know, we don't like to see these embedded for
the long term, and it just creates uncertainty. And as
you say, the end consumer in North America is actually
starting to pay for this, and we'll probably see that
retrenchment in that North American market as a result. That's
the more worrying sign. I think.

Speaker 1 (02:29):
Okay, let's talk about and improve productivity or improved increased
production out of the dairy industry. I know it's a
bit of a well, it's a bit of a hoary chestnut, really,
isn't it. Dairy conversions they're back on the table. I
understand that could be twenty or thirty or more in Canterbury.
What are you hearing?

Speaker 2 (02:45):
Yeah, I was certainly hearing sort of around the ten
to twelve I think is the number I've picked up
this year. But it is moving a little bit and
we may see a few more conversions next year. And
I think there's some people out there that are questioning
is this the right thing to do? But I think
if you go back to that significant conversions in the
early two thousand and twenty ten, we know a heck
of a lot more now than what we did back then,

(03:07):
and we know how to farm, and our farmers do
a fantastic job, and so let's learn from the things
that we've done in the past few years. And we've
got great technologies you see here at Field Days that
can help us on that. So now we're certainly supportive
of seen that growth and we're going to see this
New Zealand economy step up to the plate. I think
it's important that that dairy and the agricultural sector as

(03:27):
a whole leads the way.

Speaker 1 (03:28):
Okay, final question for you, how enthusiastic boy intore those
Fonterra Farmer shareholders in your tent there?

Speaker 2 (03:35):
Oh, look at it.

Speaker 1 (03:36):
It's that's more than a tent. It's a small village.

Speaker 2 (03:38):
Yeah, well like I don't want to get ahead of
myself in this game. But look, the conversation we've had
the last couple of days have been phenomenal and the
huge support for the cooperative. We're undertaking significant change, as
a number of you will know, and just to see
the momentum and the support and you know we'll get
on and do what we can in those markets. But
at the end of the day it comes back to
the great milk that our farmer shaholders provide. So thank

(04:00):
you for all the support that'saddy

Speaker 1 (04:02):
Well done, Miles Horrell, you and the team at Fontira
doing a great job.