The Country 19/03/25: Mike McIntyre talks to Jamie Mackay

Jarden’s head of commodities says giving only a cursory view you would be forgiven for being excited by last night’s unchanged GDT auction result, [WMP 0.2%, SMP -0.4%, AMF -1.8%, Butter 1.1%, and Cheese 1%] when of course the devil lies in the detail. Given how the index is compiled, he says the flat overall result may hide some of the more dramatic moves in the numbers that count to New Zealand dairy farmers.

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Episode Transcript

Speaker 1 (00:00):
Mike McIntyre joins this head of commodities for Jardin. Mike,
are you a Kennedy assassination conspiracy theorist like myself?

Speaker 2 (00:10):
No? No, probably a little bit before my time. But
you know, happy to be brought up to speed on it.

Speaker 1 (00:15):
You haven't been brought up to speed, or you have.

Speaker 2 (00:17):
No happy to be brought up to speed.

Speaker 1 (00:19):
Well, I don't know that Trump's releasing eighty thousand pages
very shortly, so I will be watching Fox News and
reading those tonight. I'll be full of knowledge on tomorrow's show.
Tell me, well, I woke up this morning rather early. Actually,
first thing I did every second Wednesday, which shows you
what a boring life I've got. I go to my
phone and I see what the GDT auction's doing, and

(00:40):
I see a flat result. Home powder up a wee bit.
When you told me yesterday the futures market was picking
a one to two percent drop, Surely we'd grab this
result with both hands. But you say, the devil no
pun intended for this song. The devil is in the detail.

Speaker 2 (00:58):
Yeah, I don't think it was a result obviously, you
know any where where you know horble powers approaching four
thousand dollars a time. And the key is where it is.
It's fantastic. It's just that a lot of the improvements
came through the likes of mozzarella which Fontera doesn't sell,
lactose which is actually a cost of the New Zealand
farmer rather than a benefit, and even some of the
improvements and the likes of skim milk powder and homlet

(01:20):
powder came from European sellers who they became evident when
you had a look at who the participating buyers were,
and a lot of them were Europeans. And so as
a result, you know, Europeans. Haven't somebody works up today
and decided to go to buy a New Zealand product.
They're in fact still buying European product. We have to
just be a little bit careful when we look at
the index. Probably one of the biggest contributors, or one

(01:42):
of the most interesting points was that C one skim
milk powder price which failed to clear. So historically prices
opened fifteen percent below where they closed last time. And
so you know, although the index shows it has unchanged,
in fact feil fifteen percent.

Speaker 1 (01:57):
What is the New Zealand waiting on the Global Airy
Trade auction platform.

Speaker 2 (02:04):
It would still be demonstrably high. It's just at this
time of the year where our volumes fall away quite
quickly and we're coming to the start of the European flush,
they have more of an influence than what they would
have in previous actions and so and again, you know,
GUNT have done a great job of getting or attracting
new sellers onto the platform. But as a result of that,

(02:24):
and we just have to be a little bit careful
now when we look at the headlines and numbers, because
as I said, you know, the devil is in the detail.

Speaker 1 (02:31):
Darien Z came out earlier in the week and they're
saying ten bucks for this year, which seems to be
almost locked and loaded, but interestingly ten bucks for next
season twenty five twenty six the futures market. Once again
information provided by you to me yesterday, are the futures
markets not quite seeing ten dollars for next season yet?

Speaker 2 (02:51):
And you wouldn't expect that. There's a lot of uncertainty.
Obviously there's no milk being sold for next season as
off years, and so you know, for them to come
out and say ten dollars while you know you're making
some pretty big assumptions, and not to say they're not
going to be they're not going to play out. It's
just there's a lot of unknown So, you know, I'd
look at the futures more as a more as a

(03:13):
touch point, just because of the fact that if a
farmer wants to make that of their effective milk price,
they can lock that and we're as the ten thirteen.
While it'll be exciting to see that sort of price
pop up next year, it's not something that we can
act on at the stage.

Speaker 1 (03:26):
Trump is releasing the Kennedy papers today. I have more
interest in New Zealand farmers is when he makes his
pronouncement about tariffs have like a New Zealand dairy farmers
got less to fair than say New Zealand red meat farmers,
bearing in mind we send less dairy comparatively to the
US than we do red meat.

Speaker 2 (03:47):
Yeah, I think that's probably a fair assumption. What I
would say, though, is that the US ex sport's about
fourteen percent of its solids. You know, they're a market
that's four and a half times the size of US,
twice the number of cows, but four and a half
times the size of production, but fourteen percent of their
solids are exported. So in terms of the amount of
milk exported, not not a huge difference to New Zealand,

(04:09):
but the concentration is a lot different. Sixty percent of
the are exports go through into Mexico. I sorry, forty
percent of their exports go through into Mexico, of which
sixty percent would be skimmel powder. So although Red Meats
obviously got a lot more at play, if there was
britellatory efforts from Mexican regards to the tariffs, then obviously
it'll throw a whole lot of extra product out into

(04:30):
the market. You know. Fortunately, we're about to into in
a period now where we don't produce a lot of milk,
but if it was overhem the market for a period
of time, then you know, obviously it wouldn't it wouldn't
help the start up to next season.

Speaker 1 (04:41):
A quick comment on Fonterra is what half year results
due tomorrow will have Miles hurrole on the show. What
are you expecting.

Speaker 2 (04:48):
I'm really expecting entinly of that range. So it's been
sort of three and a half months since we lasted
and updack to the milk price and since then, you know,
we've seen a third of the New Zealand season collected,
so you know, the certainty that existed at the start
of December doesn't exist now, and so i'd expect that range,
both the nine fifty at the bottom end and the
ten to fifty even at the top end to be tightened,

(05:10):
you know, and I'm really hopeful actually of an increase
from the Carrotman point from where we are now, all.

Speaker 1 (05:14):
Good news, okay, Mike McIntire, thank you very much for
your time. We will await Miles Hurrell and what he
has to say on tomorrow's show.