March 24, 2025 • 6 mins
Open Country Dairy's chief executive comments on keeping up with the Joneses - or in his case, Fonterra - when it comes to milk price. And why is OCD not following Fonterra in offering a premium for low-carbon milk?
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
He's the chief executive of Open Country Dairy, our second
biggest dairy company of course, behind Fonterra. Fonterra seems to
be going great guns, Mark Delatorte. You've got to keep
up with them. What are you doing?
Speaker 2 (00:11):
Well, what I am doing, jamieans, I'm about to get
on a fishing boat and spend a few days catching
fish down around Stuart Island. So I thought that was
a good response to that.
Speaker 1 (00:20):
Well, how does that help my payout?
Speaker 2 (00:23):
No, it keeps us, keeps us all fish and energized Jamie.
But no, no, they I mean Fonterra playing a strong game,
and the whole industry is doing well. I don't think
there's any players out there really that aren't enjoying the
current current market.
Speaker 1 (00:39):
Well, even we saw yesterday Sin lay a good half
year result, So it's good for the dairy industry across
the board as we take a bipartisan approach to our
biggest industry.
Speaker 2 (00:48):
Mark. Yeah, that's right, Jamie. I mean we obviously we
tease each other quite a bit, you know on the
show about one company versus another, But I think at
the end of the that we do have to say
as a whole industry. Everyone's benefiting and you know, helping
New Zealand's GDP and god knows me, we need that
right now.
Speaker 1 (01:06):
Now, you guys are keeping up with Fonterra. I assume,
well a lot of people say, look, Open Country only
pay as much as they have to, just enough to
keep up with Fonterra. Why don't you be a market leader. Mark,
go out there and pay eleven bucks.
Speaker 2 (01:19):
You're poking the bear, Jamie, you're poking the beer. This
is my topic. I guess at the end of the day.
You know, we pay in four payment periods. We've just
announced our third period at ten fifty seven, so I
would say that Open Country supplies are the only farmers
at this point in time that have got to check
with ten fifty seven on the payment so and they
(01:40):
get that pay that goes into their account. So you know,
I think we are market leaders. We pay in four periods.
We have to settle our fourth period before Fonterra have
announced their final price. So you know, I do do
get defensive on that one. Janney. I think I think
we play a really strong game on that, and we
go out on the limits and set tell everyone we're
out and set the price where.
Speaker 1 (02:00):
What are you forecasting for P four your final payment
period for the twenty four to twenty five season. And
the next question after that is when you add your
four payment periods together, where are you likely to sit
as an average?
Speaker 2 (02:14):
Yeah, our midpoint for P fours is a little under
where we settle P three, so we said about ten fifty.
We just see the market starting to come off a
little bit. But you know, actually the open country farmers
will say, Mark, you've been calling it down all year
and in every period you've overperformed. So that's what we think,
and that would you know, that would take us over
the ten dollars mark for the season on average. But
(02:37):
as I've mentioned before, regionally, this is a bit of difference, right,
So you know, if you're if you're with a market increasing,
if you're if you're sort of weighted towards the latter
half of the season, you'll get you'll get a high.
Speaker 1 (02:49):
So that's your Southland farmers, yeah general, yeah, mind you
they had a miserable P one low spring production.
Speaker 2 (02:56):
Yeah, really really tough starts for them, you know, and
we're you know, looking at a little bit of later
lactation milk. I guess for the season. So we're looking
to keep the facility down South running a little bit
longer this year, just to just to really help the
south Landers catch up, you know, from their poor start,
because they were feeling it obviously at the beginning of
(03:16):
the year.
Speaker 1 (03:17):
Okay, so ten dollars fifty odd for P four chuck
on top of that a premium for net zero carbon
milk and gie it could be making a fortune.
Speaker 2 (03:27):
Yeah, I can assure you gently open country there, we
won't be coming out with a zero carbon premium. We
you know at the end of the day, and we
believe that, you know, New Zealand is a total industry
outperform everyone in the world on carbon carbons, just the
latest trained and measuring efficiency and New Zealanders are the
(03:48):
most efficient producers of milk in the world. So we're
we're not buying into that that's a that's a that's
a europe thing. And we just know our product's easily
marketable to the world anyway.
Speaker 1 (03:58):
Okay, So you're not dealing with the likes of slide
than on these companies that are demanding low carbon milk.
Speaker 2 (04:05):
Yeah, we are, but we know across our milk pool,
our carbon footprints very very attractive to the mental land.
And we're not going to segregate out a few farmers,
you know, and sort of imply that the rest of
the farm of our high carbon so because they're not
relatively so we just like to keep it simple, Jamie.
We're going to pay the best price we can each period,
(04:27):
depending on what the market is, and we think we're
pretty good at that.
Speaker 1 (04:30):
Okay. Are the Chinese demanding low carbon milk?
Speaker 2 (04:33):
No? No. And if you look around the world, Jamie,
let let's be quite frank. In New Zealand, Derry, we
sell to North Africa, Middle East, Southeast Asia, diner, you know,
none of those markets are really demanding it. Now, that
doesn't mean we're flat earth as Jermie, doesn't mean we,
you know, aren't concerned about carbon emissions. And god knows,
(04:55):
Open Country have invested tens and tens of millions of
dollars in reducing our scope one two emissions and I
would suggest we almost lead the industry in that, if
not leading it. And the carbon that farmers produce is
still very very competitive against the rest of the world.
Speaker 1 (05:12):
Hey, just before I let you go, this is an
unscripted question. Five years today, it's the anniversary of the
first lockdown and it was a very challenging time. We
were going into uncharted waters, a bit like you on
FOVO straight today, Mark Delator. But when I look back
upon it, one thing that rarely stands out was how
well the primary sector did the dairy industry, the meat industry,
(05:36):
the keyw fruit pickers and harvesters and packers did getting
us through that period.
Speaker 2 (05:42):
Well, it's the same odd story asn't the changers. There's
two answers to that. The first point is I didn't
think any of it was scripted, because you keep blindsiding
me with difficult questions to me. But the second one is, look,
I think the primary industry and it doesn't matter what
the circumstances. It can be a pandemic, it can be
econom what pressures, it can be you know, different presidents
(06:03):
in the United States, it doesn't really matter. The primary
industry of New Zealand keeps standing up and doing it
for the country and that makes us so proud to
be part of it. So, you know, we're very proud.
We're not buying into too much train shall we say,
or wokeness, and we're just keeping it simple and being
the best producers of milk in the world.
Speaker 1 (06:22):
I don't think the tellies could ever be accused of
being woke. You know where I love s drop off
some blue cord on the way home.
Speaker 2 (06:28):
It's kept the first day
He's the chief executive of Open Country Dairy, our second
biggest dairy company of course, behind Fonterra. Fonterra seems to
be going great guns, Mark Delatorte. You've got to keep
up with them. What are you doing?
Speaker 2 (00:11):
Well, what I am doing, jamieans, I'm about to get
on a fishing boat and spend a few days catching
fish down around Stuart Island. So I thought that was
a good response to that.
Speaker 1 (00:20):
Well, how does that help my payout?
Speaker 2 (00:23):
No, it keeps us, keeps us all fish and energized Jamie.
But no, no, they I mean Fonterra playing a strong game,
and the whole industry is doing well. I don't think
there's any players out there really that aren't enjoying the
current current market.
Speaker 1 (00:39):
Well, even we saw yesterday Sin lay a good half
year result, So it's good for the dairy industry across
the board as we take a bipartisan approach to our
biggest industry.
Speaker 2 (00:48):
Mark. Yeah, that's right, Jamie. I mean we obviously we
tease each other quite a bit, you know on the
show about one company versus another, But I think at
the end of the that we do have to say
as a whole industry. Everyone's benefiting and you know, helping
New Zealand's GDP and god knows me, we need that
right now.
Speaker 1 (01:06):
Now, you guys are keeping up with Fonterra. I assume,
well a lot of people say, look, Open Country only
pay as much as they have to, just enough to
keep up with Fonterra. Why don't you be a market leader. Mark,
go out there and pay eleven bucks.
Speaker 2 (01:19):
You're poking the bear, Jamie, you're poking the beer. This
is my topic. I guess at the end of the day.
You know, we pay in four payment periods. We've just
announced our third period at ten fifty seven, so I
would say that Open Country supplies are the only farmers
at this point in time that have got to check
with ten fifty seven on the payment so and they
(01:40):
get that pay that goes into their account. So you know,
I think we are market leaders. We pay in four periods.
We have to settle our fourth period before Fonterra have
announced their final price. So you know, I do do
get defensive on that one. Janney. I think I think
we play a really strong game on that, and we
go out on the limits and set tell everyone we're
out and set the price where.
Speaker 1 (02:00):
What are you forecasting for P four your final payment
period for the twenty four to twenty five season. And
the next question after that is when you add your
four payment periods together, where are you likely to sit
as an average?
Speaker 2 (02:14):
Yeah, our midpoint for P fours is a little under
where we settle P three, so we said about ten fifty.
We just see the market starting to come off a
little bit. But you know, actually the open country farmers
will say, Mark, you've been calling it down all year
and in every period you've overperformed. So that's what we think,
and that would you know, that would take us over
the ten dollars mark for the season on average. But
(02:37):
as I've mentioned before, regionally, this is a bit of difference, right,
So you know, if you're if you're with a market increasing,
if you're if you're sort of weighted towards the latter
half of the season, you'll get you'll get a high.
Speaker 1 (02:49):
So that's your Southland farmers, yeah general, yeah, mind you
they had a miserable P one low spring production.
Speaker 2 (02:56):
Yeah, really really tough starts for them, you know, and
we're you know, looking at a little bit of later
lactation milk. I guess for the season. So we're looking
to keep the facility down South running a little bit
longer this year, just to just to really help the
south Landers catch up, you know, from their poor start,
because they were feeling it obviously at the beginning of
(03:16):
the year.
Speaker 1 (03:17):
Okay, so ten dollars fifty odd for P four chuck
on top of that a premium for net zero carbon
milk and gie it could be making a fortune.
Speaker 2 (03:27):
Yeah, I can assure you gently open country there, we
won't be coming out with a zero carbon premium. We
you know at the end of the day, and we
believe that, you know, New Zealand is a total industry
outperform everyone in the world on carbon carbons, just the
latest trained and measuring efficiency and New Zealanders are the
(03:48):
most efficient producers of milk in the world. So we're
we're not buying into that that's a that's a that's
a europe thing. And we just know our product's easily
marketable to the world anyway.
Speaker 1 (03:58):
Okay, So you're not dealing with the likes of slide
than on these companies that are demanding low carbon milk.
Speaker 2 (04:05):
Yeah, we are, but we know across our milk pool,
our carbon footprints very very attractive to the mental land.
And we're not going to segregate out a few farmers,
you know, and sort of imply that the rest of
the farm of our high carbon so because they're not
relatively so we just like to keep it simple, Jamie.
We're going to pay the best price we can each period,
(04:27):
depending on what the market is, and we think we're
pretty good at that.
Speaker 1 (04:30):
Okay. Are the Chinese demanding low carbon milk?
Speaker 2 (04:33):
No? No. And if you look around the world, Jamie,
let let's be quite frank. In New Zealand, Derry, we
sell to North Africa, Middle East, Southeast Asia, diner, you know,
none of those markets are really demanding it. Now, that
doesn't mean we're flat earth as Jermie, doesn't mean we,
you know, aren't concerned about carbon emissions. And god knows,
(04:55):
Open Country have invested tens and tens of millions of
dollars in reducing our scope one two emissions and I
would suggest we almost lead the industry in that, if
not leading it. And the carbon that farmers produce is
still very very competitive against the rest of the world.
Speaker 1 (05:12):
Hey, just before I let you go, this is an
unscripted question. Five years today, it's the anniversary of the
first lockdown and it was a very challenging time. We
were going into uncharted waters, a bit like you on
FOVO straight today, Mark Delator. But when I look back
upon it, one thing that rarely stands out was how
well the primary sector did the dairy industry, the meat industry,
(05:36):
the keyw fruit pickers and harvesters and packers did getting
us through that period.
Speaker 2 (05:42):
Well, it's the same odd story asn't the changers. There's
two answers to that. The first point is I didn't
think any of it was scripted, because you keep blindsiding
me with difficult questions to me. But the second one is, look,
I think the primary industry and it doesn't matter what
the circumstances. It can be a pandemic, it can be
econom what pressures, it can be you know, different presidents
(06:03):
in the United States, it doesn't really matter. The primary
industry of New Zealand keeps standing up and doing it
for the country and that makes us so proud to
be part of it. So, you know, we're very proud.
We're not buying into too much train shall we say,
or wokeness, and we're just keeping it simple and being
the best producers of milk in the world.
Speaker 1 (06:22):
I don't think the tellies could ever be accused of
being woke. You know where I love s drop off
some blue cord on the way home.
Speaker 2 (06:28):
It's kept the first day
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
New Heights with Jason & Travis Kelce
Football’s funniest family duo — Jason Kelce of the Philadelphia Eagles and Travis Kelce of the Kansas City Chiefs — team up to provide next-level access to life in the league as it unfolds. The two brothers and Super Bowl champions drop weekly insights about the weekly slate of games and share their INSIDE perspectives on trending NFL news and sports headlines. They also endlessly rag on each other as brothers do, chat the latest in pop culture and welcome some very popular and well-known friends to chat with them. Check out new episodes every Wednesday. Follow New Heights on the Wondery App, YouTube or wherever you get your podcasts. You can listen to new episodes early and ad-free, and get exclusive content on Wondery+. Join Wondery+ in the Wondery App, Apple Podcasts or Spotify. And join our new membership for a unique fan experience by going to the New Heights YouTube channel now!
24/7 News: The Latest
The latest news in 4 minutes updated every hour, every day.