The Country
  • The Country home
  • Latest news
  • Audio & podcasts
  • Opinion
  • Dairy farming
  • Sheep & beef farming
  • Rural business
  • Rural technology
  • Rural life
  • Listen on iHeart radio

Subscriptions

  • Herald Premium
  • Viva Premium
  • The Listener
  • BusinessDesk

Sections

  • Latest news
  • Coast & Country News
  • Opinion
  • Dairy farming
  • Sheep & beef farming
  • Horticulture
  • Animal health
  • Rural business
  • Rural technology
  • Rural life

Media

  • Podcasts
  • Video

Weather

  • Kaitaia
  • Whāngarei
  • Dargaville
  • Auckland
  • Thames
  • Tauranga
  • Hamilton
  • Whakatāne
  • Rotorua
  • Tokoroa
  • Te Kuiti
  • Taumurunui
  • Taupō
  • Gisborne
  • New Plymouth
  • Napier
  • Hastings
  • Dannevirke
  • Whanganui
  • Palmerston North
  • Levin
  • Paraparaumu
  • Masterton
  • Wellington
  • Motueka
  • Nelson
  • Blenheim
  • Westport
  • Reefton
  • Kaikōura
  • Greymouth
  • Hokitika
  • Christchurch
  • Ashburton
  • Timaru
  • Wānaka
  • Oamaru
  • Queenstown
  • Dunedin
  • Gore
  • Invercargill

NZME Network

  • Advertise with NZME
  • OneRoof
  • Driven Car Guide
  • BusinessDesk
  • Newstalk ZB
  • Sunlive
  • ZM
  • The Hits
  • Coast
  • Radio Hauraki
  • The Alternative Commentary Collective
  • Gold
  • Flava
  • iHeart Radio
  • Hokonui
  • Radio Wanaka
  • iHeartCountry New Zealand
  • Restaurant Hub
  • NZME Events

SubscribeSign In
Advertisement
Advertise with NZME.
Home / The Country / Listen

Fonterra's Marc Rivers on a strong future for dairy

The Country
30 Jun, 2022 09:00 PM4 mins to read

Subscribe to listen

Access to Herald Premium articles require a Premium subscription. Subscribe now to listen.
Already a subscriber?  Sign in here

Listening to articles is free for open-access content—explore other articles or learn more about text-to-speech.
‌
Save

    Share this article

File photo / John Stone

File photo / John Stone

Content brought to you by Fonterra

Milking season has just begun and Fonterra is already forecasting a higher milk price for farmers.

Last week the co-op lifted this season's forecast Farmgate Milk Price range to NZ$8.75-$10.25 per kgMS, up from NZ$8.25-$9.75 per kgMS.

This increased the midpoint of the range, which farmers are paid off, by 50 cents, to $9.50 per kgMS, Fonterra's chief financial officer, Marc Rivers said.

"That just reflects the milk supply and demand picture that we're seeing - of course, helped by a strengthening US dollar as well," he told The Country Sport Breakfast's Brian Kelly.

Advertisement
Advertise with NZME.
Advertisement
Advertise with NZME.

Last week Fonterra also announced its 2022/23 earnings guidance range of 30-45 cents per share, along with an update on the co-op's progress towards its long-term aspirations.

"The strong earnings guidance for next year reflects an expected recovery in some of our key markets, where we'd experienced some margin pressures this past year. Also, we expect to see favourable Ingredients margins," Rivers explained.

However, the wide earnings range for the next financial year reflects the current high level of uncertainty that comes with operating in a globally-traded, volatile market.

Advertisement
Advertise with NZME.

Fonterra's long-term strategy

The co-op isn't just looking into the next couple of years - it also has an eye on the 2030 financial targets outlined in its long-term strategy.

While Fonterra was on track with these targets, the last few months had shown it wouldn't be plain sailing, Rivers said.

"Just think of [recent] global events that change some of the assumptions the aspirations were based on. "

These include rising interest rates and inflation, along with a lift in commodity prices due to continued strong demand for dairy.

Input cost increases are putting pressure on the cost of debt in the short term and have also pushed on-farm costs up.

This, in combination with ongoing regulatory changes, would potentially reduce milk supply volumes, Rivers said.

"As milk prices lift, we expect that will put more pressure on working capital for us, which means our overall debt position will probably trend a bit higher - but still well within our parameters."

Overall, the fundamentals of New Zealand dairy still looked strong, despite these pressures, Rivers said.

Listen below:

"We're making good progress towards those long-term aspirations."

Advertisement
Advertise with NZME.

As part of its long-term strategy, Fonterra also has an aspiration to grow its operating profit by 40-50 per cent, from its 2021 base, by 2030.

"The way that we can achieve this is [by] focusing on our New Zealand milk, focusing on sustainability, nutrition and our innovation credentials," Rivers said.

One way to increase value is to shift more of the co-op's Ingredients portfolio towards higher-value ingredients and solutions through Fonterra's Active Living business.

The global health and wellness market was valued at US$66b and growing at 6.1 per cent per year; while Medical Nutrition was valued at US$50b globally and growing at 5 per cent per year, Rivers said.

"We feel like we're really well-positioned to take a slice of those markets.

"We've got real expertise in protein to help people maintain muscle mass for better quality of life, dairy lipids that improve people's mood and probiotics to support immunity and digestion."

Advertisement
Advertise with NZME.

The USA had a strong interest in health and wellness, along with innovative companies dedicated to this trend, and this made it a market worth pursuing, Rivers said.

Fonterra wasn't only interested in the US, he said.

"We're also focusing on Japan [and] China and there continue to be opportunities in South Korea with the team scoping out Indonesia, Thailand and Vietnam for future potential.

"So, [there are] lots of areas we're excited about."

Save

    Share this article

Latest from Listen

Dairy

‘Great guns’: Dairy livestock market heats up as calf demand rises

10 Jul 03:37 AM
The Country

The Country: Dr Jacqueline Rowarth sings the praises of young farmers

10 Jul 02:00 AM
Opinion

Opinion: Why crop protection products need protecting

09 Jul 10:30 PM

From early mornings to easy living

sponsored
Advertisement
Advertise with NZME.

Latest from Listen

‘Great guns’: Dairy livestock market heats up as calf demand rises

‘Great guns’: Dairy livestock market heats up as calf demand rises

10 Jul 03:37 AM

Sponsored content: PGG Wrightson's Mark Cuttance says feeder calf demand is increasing.

The Country: Dr Jacqueline Rowarth sings the praises of young farmers

The Country: Dr Jacqueline Rowarth sings the praises of young farmers

10 Jul 02:00 AM
Opinion: Why crop protection products need protecting

Opinion: Why crop protection products need protecting

09 Jul 10:30 PM
David Seymour co-hosts The Country

David Seymour co-hosts The Country

09 Jul 02:22 AM
Solar bat monitors uncover secrets of Auckland’s night sky
sponsored

Solar bat monitors uncover secrets of Auckland’s night sky

NZ Herald
  • About NZ Herald
  • Meet the journalists
  • Newsletters
  • Classifieds
  • Help & support
  • Contact us
  • House rules
  • Privacy Policy
  • Terms of use
  • Competition terms & conditions
  • Our use of AI
Subscriber Services
  • NZ Herald e-editions
  • Daily puzzles & quizzes
  • Manage your digital subscription
  • Manage your print subscription
  • Subscribe to the NZ Herald newspaper
  • Subscribe to Herald Premium
  • Gift a subscription
  • Subscriber FAQs
  • Subscription terms & conditions
  • Promotions and subscriber benefits
NZME Network
  • The New Zealand Herald
  • The Northland Age
  • The Northern Advocate
  • Waikato Herald
  • Bay of Plenty Times
  • Rotorua Daily Post
  • Hawke's Bay Today
  • Whanganui Chronicle
  • Viva
  • NZ Listener
  • Newstalk ZB
  • BusinessDesk
  • OneRoof
  • Driven Car Guide
  • iHeart Radio
  • Restaurant Hub
NZME
  • About NZME
  • NZME careers
  • Advertise with NZME
  • Digital self-service advertising
  • Book your classified ad
  • Photo sales
  • NZME Events
  • © Copyright 2025 NZME Publishing Limited
TOP