Charles Fergusson says he is "still digesting" the news that Fonterra posted its first-ever loss in the co-op's history yesterday.
Fonterra's Head of Farm Source for Canterbury, Marlborough and Tasman spoke to The Country Early Edition's Rowena Duncum about the $196 million loss, saying yesterday "was a big day for us."
Fergusson says the result was "really disappointing and not what our farmers expect from us and it's not us living up to our commitments."
Duncum asks Fergusson to explain what went wrong for Fonterra.
"Our forecasting was too optimistic and that set the wrong expectations," says Fergusson, reporting that butter and milk prices didn't react in the way the co-op thought they would.
"A couple of challenges in some specific markets," (New Zealand and Sri Lanka), along with not adjusting expenses led to Fonterra's disappointing annual result says Fergusson.
Fonterra is now working on a plan to make sure this does not happen again, taking stock of the business and reviewing all investments, major assets and partnerships, "to ensure they're on strategy," says Fergusson.
"We're going to commit to getting the basics right ... we're going to have more realistic forecasts and we're going to be more transparent with the basis of those forecasts to better inform our farmers so they can make decisions."