December 16, 2025 • 5 mins
Fonterra’s chief executive comments on another disappointing Global Dairy Trade Auction overnight, down 4.4%, the ninth drop in a row. Is a payout beginning with an “8″ now on the cards?
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Speaker 1 (00:00):
Another man making his final appearance on the Country for
twenty twenty five is Fontera chief executive Miles Hurrel, a
man who has been nominated several times for our AG
Person of the Year. I wonder who his nomination is.
We'll ask him a bit later, Miles, I want to
read from some commentary done by Mike McIntyre at Jardin.
He said, there's an old idiom that a falling knife
(00:23):
has no handle, and today down four point four percent,
signaling the ninth fall on the bounce. You would be
a brave person who would bet against the current run
exceeding the record of ten negative prints in a row.
And of course he's talking about the GDT auction. I'm
going to start with this as grim as it is
(00:43):
heading into Christmas. Are we now looking at a payout
that may begin with an eight?
Speaker 2 (00:49):
Yeah, Jamie, Well, it's normally nice to talk to you
in the week kend sort of leading up for Christmas.
But as you allude, this is not great news that
we start to see player in the international markets. It's
sort of been under way for a while, and the
amount of milk that's flowing out of the Northern Hemisphere
and in fact at home as well, is certainly not
helping the supply side. Pitch. Your demand still not too bad,
(01:10):
but the supply side is out there. So look, we
came out only a few weeks ago, dropped from a
ten dollars mid point down to a nine point fifty.
We're having a good look at that, and I'm likely
to have to come out sometime in the very near
future with another look. Of course, we do always have
a spread over that, so does the low end of
our spread start to look with an eight? You know,
who knows how that looks in the next few days,
(01:32):
But we'll certainly let let everyone know as we get
those numbers drawn up.
Speaker 1 (01:36):
And this is a stupid question, but have we any
idea when we might reach a floor?
Speaker 2 (01:42):
Well it well, it's not a stupid question, but it's
a question that no one really knows the answer to. Look,
you know, having spend a lot of my time in
my career in the international markets, you know, buyers in
the world their key targets are to try and beat
the market. So as the market falls, they're also in
there waiting to see it's the law and then jump
in before it sort of starts to go back up again.
(02:03):
So I guess that's the challenge that we're in at
the moment. You know, how much inventary do some of
these buyers have. It was interesting to see the Chinese
were strong buyers last night, would suggest that maybe they've
got you know, that they've got some inventary issues they're
dealing with. But it's at the same time, Southeast Asia,
Middle East was a bit quiet. So yeah, it is
the million dollar question, really, Jamie, when will let the
(02:25):
floor hit? But you know, we're not seeing any slow
down of milk, as I say, Northern Hemisphere and here
in New Zealand, despite seeing their message that these milk
prices have been unsustainable, were still seeing a lot more
milk come through.
Speaker 1 (02:37):
Do we need the weather god? I mean, this is
another stupid question. Do we need the weather gods to
help out here? And I know this sounds rather negative,
but if parts of the country dry out, it may
lower milk production which may help us reach that floor
a wee bit quicker. And just talking about the weather.
I know you've had some issues I think at your
Clandy Boy plant in South Canterbury, Mid Canterbury regarding milk collections.
Speaker 2 (03:03):
Yeah, look, look You're a brave man to be talking
about things like droughts and that with farmers, because while
it would likely have an impact on milk price and
it could be to the positive, you know, we all
know the pressures that puts on farmers.
Speaker 1 (03:16):
So it's a double edged sword, of course, So I
totally get that. But it would appair with the milk
production going at the way it is at the moment,
Myles or my words not yours. Maybe the message isn't
getting to farmers that they might want to rearrange how
much they shunt into the cows.
Speaker 2 (03:32):
Yeah, well, of course in years I say, will likely
come out in the next couple of days with an
update and so that hopefully gives a pretty clear message
to farmers around where we see the market for the
sort of the short term and then they start making
some decisions around feed and those sort of things. But
you know, who knows what the weather will do in
the early part of the new year. As you say,
it's been a bit dry up in the north, a
(03:53):
bit of storm in the south, and we saw that
last night. Yeah, there was an electoral storm around mid
Canterbury which which is likely to have an impact on
sort of collections for the next day or so, so
we're sort of assessing that. So that's not ideal as well.
So I guess this is a game that we're in,
you know, the volatility that exists in the market and
with the things like weather. You know, she's a tough
(04:14):
old game out there. And so my thoughts go for
our farmers as we deal through this over the next
a few weeks through the Christmas break.
Speaker 1 (04:21):
Well, the good news I've had enough bad news. The
good news is the long term outlook for protein is
still great. So it's still a good business to be
and if you're a Fonterra Farmer shared holder, you have
that two dollars capital repayment coming in the first half
of twenty twenty six. Radio You have been nominated several
times AG Person of the Year. I think you were
a runner up to Todd McLay last year. Who's your
(04:42):
AG Person of the Year?
Speaker 2 (04:43):
Not allowed to name yourself, Miles, Thank thanks, Shemmy, But
I'm going to give a call it actually to Andy McFarland.
And Andy's just stood down from our board after eight
years and has been a staunch supporter obviously the co
op model and what we do, but he's just been
fantastic as a supporter of the business. He's also still
(05:05):
on the ends CO board. He's part of og Research
for a number of years and had a lot of
workout Lincoln University. But I went to a couple of
his farewells, one down Ashburton actually a few weeks ago,
and then one we head up here with the board
last week, and just what a wonderful guy knows the
industries are so well as passionate about New Zealand and
passionate New Zealand eggs. So my call out to Andy
(05:27):
and I watched him all the best for his sort
of retirement from Fonterra at.
Speaker 1 (05:31):
Least, and I've had the good pleasure of meeting Andy McFarlane.
He's a good bloke to boot Miles Harrell, thanks for
always being available at the drop of a hat quite
literally here on the country. We appreciate it talking to
the top dog.
Speaker 2 (05:43):
Good only thanks Jamie. Have a good Christmas year.
Another man making his final appearance on the Country for
twenty twenty five is Fontera chief executive Miles Hurrel, a
man who has been nominated several times for our AG
Person of the Year. I wonder who his nomination is.
We'll ask him a bit later, Miles, I want to
read from some commentary done by Mike McIntyre at Jardin.
He said, there's an old idiom that a falling knife
(00:23):
has no handle, and today down four point four percent,
signaling the ninth fall on the bounce. You would be
a brave person who would bet against the current run
exceeding the record of ten negative prints in a row.
And of course he's talking about the GDT auction. I'm
going to start with this as grim as it is
(00:43):
heading into Christmas. Are we now looking at a payout
that may begin with an eight?
Speaker 2 (00:49):
Yeah, Jamie, Well, it's normally nice to talk to you
in the week kend sort of leading up for Christmas.
But as you allude, this is not great news that
we start to see player in the international markets. It's
sort of been under way for a while, and the
amount of milk that's flowing out of the Northern Hemisphere
and in fact at home as well, is certainly not
helping the supply side. Pitch. Your demand still not too bad,
(01:10):
but the supply side is out there. So look, we
came out only a few weeks ago, dropped from a
ten dollars mid point down to a nine point fifty.
We're having a good look at that, and I'm likely
to have to come out sometime in the very near
future with another look. Of course, we do always have
a spread over that, so does the low end of
our spread start to look with an eight? You know,
who knows how that looks in the next few days,
(01:32):
But we'll certainly let let everyone know as we get
those numbers drawn up.
Speaker 1 (01:36):
And this is a stupid question, but have we any
idea when we might reach a floor?
Speaker 2 (01:42):
Well it well, it's not a stupid question, but it's
a question that no one really knows the answer to. Look,
you know, having spend a lot of my time in
my career in the international markets, you know, buyers in
the world their key targets are to try and beat
the market. So as the market falls, they're also in
there waiting to see it's the law and then jump
in before it sort of starts to go back up again.
(02:03):
So I guess that's the challenge that we're in at
the moment. You know, how much inventary do some of
these buyers have. It was interesting to see the Chinese
were strong buyers last night, would suggest that maybe they've
got you know, that they've got some inventary issues they're
dealing with. But it's at the same time, Southeast Asia,
Middle East was a bit quiet. So yeah, it is
the million dollar question, really, Jamie, when will let the
(02:25):
floor hit? But you know, we're not seeing any slow
down of milk, as I say, Northern Hemisphere and here
in New Zealand, despite seeing their message that these milk
prices have been unsustainable, were still seeing a lot more
milk come through.
Speaker 1 (02:37):
Do we need the weather god? I mean, this is
another stupid question. Do we need the weather gods to
help out here? And I know this sounds rather negative,
but if parts of the country dry out, it may
lower milk production which may help us reach that floor
a wee bit quicker. And just talking about the weather.
I know you've had some issues I think at your
Clandy Boy plant in South Canterbury, Mid Canterbury regarding milk collections.
Speaker 2 (03:03):
Yeah, look, look You're a brave man to be talking
about things like droughts and that with farmers, because while
it would likely have an impact on milk price and
it could be to the positive, you know, we all
know the pressures that puts on farmers.
Speaker 1 (03:16):
So it's a double edged sword, of course, So I
totally get that. But it would appair with the milk
production going at the way it is at the moment,
Myles or my words not yours. Maybe the message isn't
getting to farmers that they might want to rearrange how
much they shunt into the cows.
Speaker 2 (03:32):
Yeah, well, of course in years I say, will likely
come out in the next couple of days with an
update and so that hopefully gives a pretty clear message
to farmers around where we see the market for the
sort of the short term and then they start making
some decisions around feed and those sort of things. But
you know, who knows what the weather will do in
the early part of the new year. As you say,
it's been a bit dry up in the north, a
(03:53):
bit of storm in the south, and we saw that
last night. Yeah, there was an electoral storm around mid
Canterbury which which is likely to have an impact on
sort of collections for the next day or so, so
we're sort of assessing that. So that's not ideal as well.
So I guess this is a game that we're in,
you know, the volatility that exists in the market and
with the things like weather. You know, she's a tough
(04:14):
old game out there. And so my thoughts go for
our farmers as we deal through this over the next
a few weeks through the Christmas break.
Speaker 1 (04:21):
Well, the good news I've had enough bad news. The
good news is the long term outlook for protein is
still great. So it's still a good business to be
and if you're a Fonterra Farmer shared holder, you have
that two dollars capital repayment coming in the first half
of twenty twenty six. Radio You have been nominated several
times AG Person of the Year. I think you were
a runner up to Todd McLay last year. Who's your
(04:42):
AG Person of the Year?
Speaker 2 (04:43):
Not allowed to name yourself, Miles, Thank thanks, Shemmy, But
I'm going to give a call it actually to Andy McFarland.
And Andy's just stood down from our board after eight
years and has been a staunch supporter obviously the co
op model and what we do, but he's just been
fantastic as a supporter of the business. He's also still
(05:05):
on the ends CO board. He's part of og Research
for a number of years and had a lot of
workout Lincoln University. But I went to a couple of
his farewells, one down Ashburton actually a few weeks ago,
and then one we head up here with the board
last week, and just what a wonderful guy knows the
industries are so well as passionate about New Zealand and
passionate New Zealand eggs. So my call out to Andy
(05:27):
and I watched him all the best for his sort
of retirement from Fonterra at.
Speaker 1 (05:31):
Least, and I've had the good pleasure of meeting Andy McFarlane.
He's a good bloke to boot Miles Harrell, thanks for
always being available at the drop of a hat quite
literally here on the country. We appreciate it talking to
the top dog.
Speaker 2 (05:43):
Good only thanks Jamie. Have a good Christmas year.
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