The Country 21/08/25: Matt Bolger talks to Jamie Mackay

Fonterra’s MD of Co-op Affairs comments on the increased 2024/25 season forecast Farmgate Milk Price -  from $10.00 per kgMS to $10.15 per kgMS, with the range narrowing from $9.70 - $10.30 per kgMS to $10.10 - $10.20 per kgMS. Fonterra has also retained the $10.00 per kgMS forecast for the current 2025/26 season and narrowed the range from $8.00 - $11.00 per kgMS to $9.00 - $11.00 per kgMS.

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Episode Transcript

Speaker 1 (00:00):
More good news for the dairy industry this morning. Fonterra
coming out and increasing the twenty four twenty five season
forecast milk price from ten bucks to ten dollars fifteen,
and we're going to talk about twenty five twenty six
as well to tell us more. He is the managing
director of co op Affairs for Fonterra. Matt Boulger, Hey, Matt,

(00:21):
does your old man Jim Jim Bolger James Bolger, does
he listen to the show, because if he does, I'd
like to give him a shout out, good farmer and
prime minister, former prime minister.

Speaker 2 (00:34):
He may do, Jamie, I don't know, but I checked
him regularly. So get as year listening GB.

Speaker 1 (00:39):
Well, yeah, every listener is a prisoner, and we're in
the ratings season, so just tell him to tune on. Okay,
So I guess there's no real surprise in this one, Matt.
We knew that ten dollars was pretty much locked and loaded.
You're at ten fifteen. This is for the season we've
just finished, and that band has narrowed right down to
ten dollars ten to ten dollars twenty. Effectively, it's locked

(01:01):
and loaded.

Speaker 2 (01:02):
Yeah, we're pretty close. Look, this is for the season
just finished, and you know it's good news coming from
ten to ten to fifteen. We'll announce our final price,
of course, when we close out the year in about
a month's time. But border management, we've taken a look
at this and we're very close to that now. So
we've got a narrow range. A few last things to finalize,

(01:24):
but you know, ten fifteen's ten fifteens great for the
year just gone, and obviously holding ten dollars for the
year ahead as well.

Speaker 1 (01:32):
I found that the more interesting numbers. So you've also
retained ten dollars, as you said, for the year we're
in now twenty five twenty six, and you had that
wide range. It was from eleven eight dollars, should I say,
to eleven dollars. Strangely, I thought at the time the
midpoint wasn't nine to fifty. You said ten dollars. So
what you've done is effectively you've moved the midpoint to

(01:55):
the midpoint. Does that make sense or is that a
bit irish?

Speaker 2 (01:58):
No, I'm with you. So look, when we came out
with our ten dollars forecast for the current season twenty
five twenty six. We did put an upside of the
range at eleven and a downside at eight dollars. So
what that was signaling was that there was greater risk
out there in the environment. And if you cast your

(02:19):
mind back to May. Of course, even back then, the
range of outcomes that could have happened geopolitically on the
tariff front, all of that was weighted to the downside,
and we wanted to signal that to farmers as we've
come into the season. Now you know, a few few
months on, there's still a risk there. So we've narrowed
that range, but it's still nine dollars to eleven with

(02:39):
the mid point of ten. What that's saying is that
some of those really big downsides haven't eventuated. So that's
a signal of confidence. But look, we're still very early
in the season, so plenty of order to go under
the bridge. But no again good news for farmersy.

Speaker 1 (02:54):
Yeah, you're also very early into the Trump terraff regime.
What sort of effect does that having thus far or
is it too early to tell?

Speaker 2 (03:04):
Yeah, it's too early to tell overall, but it is
it is having an effect. So it's the way it
plays out is really on a customer by customer basis.
We've got, you know, many different customers in the United States,
and with each customer we might have a range of
different contracts that you know, are renewed or negotiated at
different times in each contract might have different terms. So

(03:25):
within that fifteen percent, you know, it's not a disaster,
but it's not great, particularly when we're looking at other countries,
say Canada, which is good a zero per cent tariff
and its protein exports are effectively subsidized. So we're working
really closely with officials and Minister McLay and team to

(03:46):
look at that with Canada and appreciate all the work
that they're doing on there. But no, so that is
a cloud on our horizon. But as I've said before,
Richard Allen and the team, they do a great job
of navigating that, working really closely with customers. So challenging,
but we'll get through, okay.

Speaker 1 (04:01):
And the other number that came out this morning, I've
got to cover this one off. The forecast earnings of
sixty five to seventy five cents per share remain unchanged,
and this is all about how much farmers are going
to get paid for their annual dividend.

Speaker 2 (04:17):
Yep, there's the one, So no change on that, and
I guess just reflecting it's you know, it's great to
have a high mil price looking at ten fifteen for
the season just gone and still maintaining those high earnings.
You know, a lot of parts of the economy are
having a pretty rough time, but with holding those innings
high and particularly that shift and milk price, you know,
it's more than two hundred million dollars extra flying back

(04:39):
out into the economy, which is good.

Speaker 1 (04:42):
Good news day about the dairy industry. Today tomorrow will
be talking more about a good news day for the
Kiwi fruit industry with Jason to Break. The chief executive
of Zespriy Matt Bolger, Thanks for your time

Speaker 2 (04:54):
Great Thanks Jim