The Country 22/07/26: Andrew Murray talks to Jamie Mackay

Fonterra’s chief financial officer comments on last night’s positive GDT Auction (up 1.5%, WMP +1.6%, SMP +2.8%).

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:00):
Here is the chief financial officer for Fonterra. Let's have

(00:02):
a look at last night's global Dairy Trade auction. We
stemmed the bleeding up one point five percent, very pleasing
result for skim milk powder in particular two point eight
percent and Andrew. This comes off the back of a
relatively poor start to the twenty six twenty seven season,
worth three falls in a row, in the last one
being five percent. There would have been a big sigh

(00:25):
of relief breathed or expelled at Fonterra this morning. Was
that when you got unto the office.

Speaker 2 (00:32):
Oh, I think very much in Laine with what we
had expected on this one. Jemmy. I think if we
see we're very early in the season still, so it's
not unusual to have a bit of volatility going on.
And that's actually relatively few volume you actually on the auction,
so it's nice to see that as we know continue
to move up the moment of volume that's on, then
we're seeing some good forming of the pacing.

Speaker 1 (00:53):
So whether events could play into and out of New
Zealand farmer's hands, and I'm thinking of the heat wave
and northern hemisphere that's having an effect on production. But
of course we've got the threat of an al Ninia
or a super al Nino depending on who you believe here.
While that may lift prices, it's certainly going to you
would think knock production.

Speaker 2 (01:14):
Yeah, so I think if you look particularly, I mean
you mentioned you know, skin earlier, I think the skin
price definitely for sure has got a bit of a
four under it. Maybe as well we might qull it.
In terms of that production coming off in Europe, that's
certainly helping pricing there. You know, we need to see
how this please out for a New Zealand production. I think,
you know, as you see, we may end up having

(01:35):
a little bit less milk around, but it's really going
to depend on taming. So you know, how does that
come through exactly, how does it play out in the
different regions. So something that we're watching very closely. But yet,
as you said, could clear out in two different ways.

Speaker 1 (01:47):
Home milk powder up one point six percent, skim milk
powder up two point eight percent. The powders were doing
their job or doing their heavy lifting. Should we read
anything into cheese down six point five percent?

Speaker 2 (01:59):
I think I mean cheese you know, again, there's a
little bit more product around at this time of the
year as well. So we're seeing that list in terms
of what's coming out with this, you know, Austuio New
Zealand type. Reason, we do still have you know, a
premium against the European product, but there is plenty of
supply out there, particularly Europe and the US, and you
see that playing out because you know, they've had some

(02:20):
some strong milk supply in you know, in the past
sort of year or so. But also there's really good
returns from way as well, so that's actually you know,
encouraging cheese production. But we are still getting a premium here.
I think what we're seeing is just a little bit
of hey, there's a bit more product around, and so
you know, it's getting a little bit of a diamond
on the price there.

Speaker 1 (02:37):
I was joking with my US farm and correspondent on
yes that I show that maybe cheese has now become
a byproduct of y production.

Speaker 2 (02:46):
Look, it's certainly if you look at the returns, you know,
you can see why people would be doing a lot
of cheese, and certainly in the US, you know, there's
plenty of cheese production going on, and you know that
those those way streams are valuable well.

Speaker 1 (02:59):
I love the cheese in their burgers. Hey, Andrew Murray,
I think we'll take this one. After three disappointing GDT
auctions are positive, up one point five percent. Thanks for
your time, No worries to Jimmy