November 26, 2025 • 5 mins
The chief executive of Open Country Dairy, and soothsayer of milk prices, joins us to discuss a falling market.
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Episode Transcript
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Speaker 1 (00:00):
At the moment, this man is running around the country
playing Santa Claus at the Open Country Dairy Christmas parties
in between that he is a soothsayer, a nostrodamist. Because
Mark de Latour, you said to me several months ago,
off the record, and we'll put it on the record
now that nine point fifty was going to be the number.
Speaker 2 (00:21):
Good afternoon, Jamie. Yeah, Well that was off the record,
and it was an opinion. You know, we was talking
our a company about statements are either opinion, assessment or fact,
and that was an opinion. And you know, I think
that it's going to be about that. I mean, most
farmers a couple of years ago would have jumped at
nine to fifty. And I guess after the fantastic result
(00:42):
last season, that seems a bit of a downer. But
at the end of the day for the dairy industry
and he's in, it will be a couple of strong seasons,
even if it is trending down.
Speaker 1 (00:51):
Just at the moment is the downside risk on that
nine fifty? And I'm only asking you wearing your Open
Country Dairy hat because behind Fonterra, who are the length
of the strait The biggest dairy processor in the country.
They've got about eighty percent. You guys are what's thirteen
or fourteen percent, so you are clearly the second major player.
Speaker 2 (01:11):
Yeah, that's right. I guess we are two new acquisitions.
You know, we're around that thirteen percent mark for sure.
So look, I think there is you know, there's no
doubt that the prices that the industry has been enjoying,
you know, it's the best that the season will be.
I think it is trending down. There's plenty of milk
product around. China is a year away from really getting
(01:34):
their domestic supply sorted. It is coming down their domestic supply,
but it's so they're not buying, you know, really what
they were, and so there is a little bit of
downward pressures. You know, I don't see a really low price,
you know, I don't think it's going to get to that,
but but you know, there's certainly some risk we should
all be aware of. You know, we've been talking about
(01:56):
that at our supplier meetings as well as the Christmas
part is that we're having at the moment. So just
keeping farmers aware that you know, there are there is
some downside and be careful not to start borrowing too
much money from the banks.
Speaker 1 (02:11):
The futures market. And I know sometimes you're a wee
bit dismissive of this, But the futures market, no surprise,
for this season's currently sitting at nine dollars fifty Everyone
now seems to be in unison with that number. But
perhaps more concerningly, twenty six twenty seven is sitting at
eight dollars sixty eight. I know there's a lot of
water to go under the bridge. You know, we're talking
(02:32):
eighteen months out or more, aren't we, But that's a
bit of a worrying number.
Speaker 2 (02:38):
Yeah, it is. And I am dismissive of the futures market,
certainly in the dairy world, because it's it's such a
shallow marketing. It's not that liquid, so it tends to
be more the opinion of a couple of larger players
that operate in that market more than a true futures market.
But you know, I think there's probably a little bit
(03:00):
leak looking at the moment. But you know, I think
we've seen you know, changes just this year alone where
futures have been significantly above say a GDT type number
and below and you know, We've seen quite a few
contracts this year in the industry at a New Zealand
signed up on futures rather than using judy t as
are based and a few sales have been done based
(03:22):
on futures, which is unsettled things a little bit. So
I don't put too much weight though, in that number,
because it is quite volatile. A couple of trades can
move it significantly up and down.
Speaker 1 (03:33):
We're through the peak of seasonal production and you know
what plays out from here on and is in the
lap of the weather gods. But I wonder whether the
market was slightly distorted by talk of ten dollars and
there's perhaps more supplement feeding gone and than would have
been the case of nine point fifty was the number.
Speaker 2 (03:53):
Yeah, I think I think we'll probably see that naturally
level off. You know, people be a bit more cautious
with the winter feed and how many stock units they
keep on the land. But I think, you know, again,
I'll just stress we're not we're not looking at anything
too bleak at this stage. There's not think, you know,
let's not do a chicken a little scenario here, because
(04:13):
it's just the market is softening a little bit. But
it's softening from a very very high base. So you
know the sentiment of the farmer, isn't that that we've
you know, we've celebrated or started celebrating Christmas with so
if I've been very very positive and conscious that you know,
the gold rush can't last forever. But but there's nothing
really on the horizon that suggests that it's going to
(04:34):
be you know, it's going to convert to the opposite
that quickly.
Speaker 1 (04:36):
Yeah, and the biggest cost on farm is interest rates.
I know we're now at the bottom of that cycle,
but it's a good time perhaps to lock in without
wanting to be a mortgage advisor. But you can mitigate risk.
You can fix your milk price and you can also
fix your interest rates.
Speaker 2 (04:53):
Yeah, that's right. And it's it's you know, it is
about people's appetite for risk and their own balance sheets. Jamie.
We don't try and advise, but you know, as I said,
we're halfway through our Christmas functions now. I think we're
fed and watered over a thousand people in the last
week and a half. So you know, it's good to
celebrate with farmers and give a little bit back and
(05:14):
say thank you. But you know, the message that we've
been given is clearly the financial sector is now going
to turn around and say geealous debts being paid back
after the good in a season or so, we're going
to have to start landing again. So you know, to
everyone just just be careful. There's going to be some incentives,
but we know how those rules can change as seasonal
(05:36):
prices go up and down. So you know, a good
prudent approach is something we recommend.
Speaker 1 (05:42):
Hey, Mark delatour chief executive of Open Country Dairy, I
know you're on the Christmas rounds as you say, no doubt,
cheese and crackers will be on the menu, along with
a couple of beverages. Thanks for your time or catch
you just before Christmas.
Speaker 2 (05:55):
No worries, Jammy, good to talk
At the moment, this man is running around the country
playing Santa Claus at the Open Country Dairy Christmas parties
in between that he is a soothsayer, a nostrodamist. Because
Mark de Latour, you said to me several months ago,
off the record, and we'll put it on the record
now that nine point fifty was going to be the number.
Speaker 2 (00:21):
Good afternoon, Jamie. Yeah, Well that was off the record,
and it was an opinion. You know, we was talking
our a company about statements are either opinion, assessment or fact,
and that was an opinion. And you know, I think
that it's going to be about that. I mean, most
farmers a couple of years ago would have jumped at
nine to fifty. And I guess after the fantastic result
(00:42):
last season, that seems a bit of a downer. But
at the end of the day for the dairy industry
and he's in, it will be a couple of strong seasons,
even if it is trending down.
Speaker 1 (00:51):
Just at the moment is the downside risk on that
nine fifty? And I'm only asking you wearing your Open
Country Dairy hat because behind Fonterra, who are the length
of the strait The biggest dairy processor in the country.
They've got about eighty percent. You guys are what's thirteen
or fourteen percent, so you are clearly the second major player.
Speaker 2 (01:11):
Yeah, that's right. I guess we are two new acquisitions.
You know, we're around that thirteen percent mark for sure.
So look, I think there is you know, there's no
doubt that the prices that the industry has been enjoying,
you know, it's the best that the season will be.
I think it is trending down. There's plenty of milk
product around. China is a year away from really getting
(01:34):
their domestic supply sorted. It is coming down their domestic supply,
but it's so they're not buying, you know, really what
they were, and so there is a little bit of
downward pressures. You know, I don't see a really low price,
you know, I don't think it's going to get to that,
but but you know, there's certainly some risk we should
all be aware of. You know, we've been talking about
(01:56):
that at our supplier meetings as well as the Christmas
part is that we're having at the moment. So just
keeping farmers aware that you know, there are there is
some downside and be careful not to start borrowing too
much money from the banks.
Speaker 1 (02:11):
The futures market. And I know sometimes you're a wee
bit dismissive of this, But the futures market, no surprise,
for this season's currently sitting at nine dollars fifty Everyone
now seems to be in unison with that number. But
perhaps more concerningly, twenty six twenty seven is sitting at
eight dollars sixty eight. I know there's a lot of
water to go under the bridge. You know, we're talking
(02:32):
eighteen months out or more, aren't we, But that's a
bit of a worrying number.
Speaker 2 (02:38):
Yeah, it is. And I am dismissive of the futures market,
certainly in the dairy world, because it's it's such a
shallow marketing. It's not that liquid, so it tends to
be more the opinion of a couple of larger players
that operate in that market more than a true futures market.
But you know, I think there's probably a little bit
(03:00):
leak looking at the moment. But you know, I think
we've seen you know, changes just this year alone where
futures have been significantly above say a GDT type number
and below and you know, We've seen quite a few
contracts this year in the industry at a New Zealand
signed up on futures rather than using judy t as
are based and a few sales have been done based
(03:22):
on futures, which is unsettled things a little bit. So
I don't put too much weight though, in that number,
because it is quite volatile. A couple of trades can
move it significantly up and down.
Speaker 1 (03:33):
We're through the peak of seasonal production and you know
what plays out from here on and is in the
lap of the weather gods. But I wonder whether the
market was slightly distorted by talk of ten dollars and
there's perhaps more supplement feeding gone and than would have
been the case of nine point fifty was the number.
Speaker 2 (03:53):
Yeah, I think I think we'll probably see that naturally
level off. You know, people be a bit more cautious
with the winter feed and how many stock units they
keep on the land. But I think, you know, again,
I'll just stress we're not we're not looking at anything
too bleak at this stage. There's not think, you know,
let's not do a chicken a little scenario here, because
(04:13):
it's just the market is softening a little bit. But
it's softening from a very very high base. So you
know the sentiment of the farmer, isn't that that we've
you know, we've celebrated or started celebrating Christmas with so
if I've been very very positive and conscious that you know,
the gold rush can't last forever. But but there's nothing
really on the horizon that suggests that it's going to
(04:34):
be you know, it's going to convert to the opposite
that quickly.
Speaker 1 (04:36):
Yeah, and the biggest cost on farm is interest rates.
I know we're now at the bottom of that cycle,
but it's a good time perhaps to lock in without
wanting to be a mortgage advisor. But you can mitigate risk.
You can fix your milk price and you can also
fix your interest rates.
Speaker 2 (04:53):
Yeah, that's right. And it's it's you know, it is
about people's appetite for risk and their own balance sheets. Jamie.
We don't try and advise, but you know, as I said,
we're halfway through our Christmas functions now. I think we're
fed and watered over a thousand people in the last
week and a half. So you know, it's good to
celebrate with farmers and give a little bit back and
(05:14):
say thank you. But you know, the message that we've
been given is clearly the financial sector is now going
to turn around and say geealous debts being paid back
after the good in a season or so, we're going
to have to start landing again. So you know, to
everyone just just be careful. There's going to be some incentives,
but we know how those rules can change as seasonal
(05:36):
prices go up and down. So you know, a good
prudent approach is something we recommend.
Speaker 1 (05:42):
Hey, Mark delatour chief executive of Open Country Dairy, I
know you're on the Christmas rounds as you say, no doubt,
cheese and crackers will be on the menu, along with
a couple of beverages. Thanks for your time or catch
you just before Christmas.
Speaker 2 (05:55):
No worries, Jammy, good to talk
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