The Country 19/11/25: Matt Bolger talks to Jamie Mackay

Fonterra's MD of Co-op Affairs reviews last night's GDT Auction - the seventh fall in a row - with  the index down 3%, WMP down 1.9% and butter gets a battering down 7.6%.

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Episode Transcript

Speaker 1 (00:00):
Global Dary Trade auction overnight. No surprise, the futures market
was picking it for the seventh time in a row.
It went down down three percent, whole milk powder down
one point nine percent, but I took a bit of
a spanking down seven point six percent to tell us more.
Fonterra's managing director of co Op Affairs, Matt Boulger. Matt,

(00:21):
before you comment on that, I just want to say
to you. I haven't spoken to you since the passing
of your father, former Prime Minister Jim Boulger. What a
lovely sendoff he had.

Speaker 2 (00:31):
Yeah, thanks Jamie, and good to talk.

Speaker 1 (00:32):
You know.

Speaker 2 (00:33):
It was a look it's always hard to lose a parent,
but now we managed to give him a good send
off and he's we're being really touched by the tributes
coming in and the support for mum of the family.
So that's been great.

Speaker 1 (00:46):
Well. I think, unlike other National prime ministers, and I
can think of Rob Muldoon and history's probably judged him
worse as time has gone on, I think history has
been kind to Jim Bolger, the great helmsman, especially with
some the foresight he had around treaty settlements.

Speaker 2 (01:03):
Yeah, thank you. Oh, look at some politics isn't for
the faint hearted, so hopefully you don't go into it
to win claudits. But no, people of people have been
very kind in there in their memories. And as I
reminded somebody, he was in the workforce for about eighty years,
but he was only a politician for about twenty five.
So he did a few other things, including being a

(01:24):
farmer for a fair while as well, so he had
a few different parts to life.

Speaker 1 (01:29):
Absolutely rest and pace. Look, you talked about politics being
a tough gig. Is it a tough gig at the
moment to try and sell whole milk, powder and butter
on the world stage. This is seven in a row.
I know that you're going to reassess perhaps that ten
dollars forecast milk price in early December. It's got to
go down. Gravity would suggest it has to.

Speaker 2 (01:51):
So look, it wasn't a great option, but I guess
it reflects really underlying touply on demand Dynamic's no surprises
there with bod pricing. So what we've seen is a
lot of milk out of the big producing and export regions.
New Zealand milk is up quite significantly, particularly the South
Islands really really charging in terms of milk bolumes, but

(02:14):
also places like Europe's probably about three percent up year
and year in August with recovery from blue tongue over there.
The States is maybe up four percent year in year,
and places like Argentina and Uruguay are going pretty well.
In Brazil is importing a bit less, so with relatively
flat demand and a lot of supply coming on, I

(02:34):
guess that's the dynamic we're seeing there.

Speaker 1 (02:36):
It's just the commodity cycle because at these high prices,
the tap is literally being turned on right around the world,
and it's probably being aided by low grain prices.

Speaker 2 (02:46):
Yeah, yep, you got all those factors. I mean, one
thing to be conscious of, a course, is we would
have contracted at this stage in the season. We're probably
about fifty percent contracted. And a lot of those contracts,
of course, were written and booked at as that were
higher earlier in the season. So you know, the question
is what will the milk price be. We'll get the

(03:06):
team together and digest the numbers, and I guess look
at the big supply demand balance, what inventories are looking like,
and look at that over the next few days and
see if we do need to do anything.

Speaker 1 (03:16):
The other mitigating factor out there is the low exchange
rates sitting at about under fifty seven US since fifty
six and a half something like that. But I do
note that Mike McIntyre from Jardins says that that won't
really affect this season because as of the twenty fifth
September I two months ago, Fonterra had already hedged seventy
two percent of the current season. So the low currency,

(03:40):
I'm hoping the trading department's getting in boots and all
at the moment, Matt and grabbing some of this action
for next season.

Speaker 2 (03:47):
Yep. Yeah, we've got a pretty good good crew that
looks at exchange rates. Obviously, it's a big factor, and
it's really good for exports across the BARD and US
in and ourselves included. To have that exchange rate. We
haven't always had the SA situation of relatively higher commodity
prices and their lower exchange rates, so certainly that's a
positive for US.

Speaker 1 (04:06):
Matt Bolger, thanks for some of your time. We'll await
that early December announcement from Fonterra on the adjusted and
I'm sure it will be adjusted milk forecast price. Thanks
for your time.

Speaker 2 (04:18):
Thanks Jamie,