Fonterra revels in record tonnage

By KEVIN TAYLOR

October was a spectacular month for the New Zealand dairy industry, with a record 215,000 tonnes of product exported, and this month will not be far behind.

The amount shipped last month would have given a glass of milk to every person on the planet.

Fonterra said November looked almost as good, with forecasts of 190,000 tonnes.

The news comes after signs of a turnaround in dairy prices.

The ANZ World Commodity Price Index is at its highest level in nearly a year.

Fonterra chief executive Craig Norgate said last month's record meant products from its factories were filling a shipping container every three minutes and 15 seconds.

He said a late spring flush at the start of this month could mean more dairy production and export records, which was good news for Fonterra's 13,000 shareholders and the country's export performance.

Fonterra contributes 20 per cent of New Zealand's export income.

Cool spring weather had delayed the flush - the time of the season when Fonterra receives the highest milk volumes from suppliers.

Norgate said the flush was normally expected about October 20, but this year it was November 2.

The co-op processed 67.681 million litres, up on last year's flush of 66.937 million litres.



The ANZ commodity index, released last week, suggested room for optimism about prices for New Zealand's key primary exports over the next few months.

The international dairy market, in particular, looked likely to stay fairly strong.

Dairy prices increased 9.4 per cent last month, consistent with Fonterra expectations.

Norgate said last month's export volumes were 48,000 tonnes better than the previous record of 167,000 tonnes set in May last year.



The production put the farmer-owned co-operative in a strong position to meet sales targets for the year, he said.

Manufacturing plants had performed at maximum reliability during the record flows, and had achieved record throughput.

"Perhaps the most important achievement was producing the product mix for which the market is giving the best returns," Norgate said.

Fonterra has just released its strategy for the next 10 years, which promises shareholders 13 to 15 per cent annual returns, and productivity gains of 3 to 4 per cent.