“Speaking with farmers, I think ‘tight’ is probably the word that best describes the start to the season when it comes to growth of feed,” Cullen said.
“Looking ahead, we’ve had a bit of rain, there’s plenty of moisture in the ground, we’ve seen some warmer temps this week, and now we’ve got some warmer weather forecast as well.
“So, I’m looking forward to seeing some of those growth rates really improve.”
Cullen has been on the road recently, meeting with farmer shareholders from Nelson to Timaru as part of Fonterra’s annual results roadshow.
He said the feedback had been largely positive.
“Farmers are pretty happy with the co-op’s performance last year — it’s a really great set of results,” he said.
The proposed divestment of Fonterra’s consumer business was a hot topic, and Cullen said there was a lot of discussion around what the co-op would look like without the Mainland Group.
He said that, post divestment, Fonterra would look “a lot more focused”.
“There’ll still be that global reach through our business-to-business channels, but specifically, that focus will be on our Ingredients and Foodservice business, which generates the Farmgate Milk Price and the majority of the co-op earnings.”
He said the proposed sale was subject to shareholder approval, with voting open until October 28 and a special online meeting scheduled for the 30th.
“So, if that’s supported by farmers, we’ll then move through the relevant regulatory approvals process, and then assuming we get it through that, the total proceeds of the sale will be $4.22 billion, and the co-op’s targeting a tax-free capital return of $2 per share, back to farmers.”
Listen below:
Meanwhile, Fonterra has two major South Island projects on the go: the new UHT cream plant at Edendale and the advanced protein expansion at Studholme.
Cullen said the Edendale plant was progressing well.
“We’re expecting the first products off the line there in August next year,” he said.
“Initial capacity is around 50 million litres of UHT cream annually, and the ability to grow that to over 100 million by 2030.”
As for the Studholme expansion, Cullen said it was on track for 2026.
He said it would boost production of Fonterra’s advanced proteins used in medical and sports nutrition products.
“These are a couple of examples of how the co-op’s growing its portfolio of high-value products and really meeting that growing demand, and delivering further value to our farmer shareholders.”
