Fonterra posts strong half-year profit as milk price holds firm, Kiwi scientists lead breakthrough in plant disease detections, and mixed fortunes for wool sales in both islands.

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Fonterra posts strong half-year profit as milk price holds firm

Fonterra has delivered a positive half-year result with profit after tax reaching $729 million and earnings of 44 cents per share. The dairy giant announced an interim dividend of 22 cents per share while maintaining its 2024/25 season forecast Farmgate Milk Price midpoint at $10.00 per kgMS, now with a narrowed range of $9.70 to $10.30.

The strong half-year performance was underpinned by an optimised product mix across sales channels. Ingredients channel performance was particularly notable with operating profit up $229 million to $696 million, despite sales volume being down 3.9%. Foodservice channel saw sales volume growth of 8.3% with operating profit at $230 million, while Consumer channel volumes increased 8.5% with operating profit holding steady at $173 million.

CEO Miles Hurrell says the Co-op is focusing on driving value by delivering strong financial performance while achieving the highest sustainable Farmgate Milk Price. The company is simultaneously implementing its strategy and investing for the future, with site works underway at Studholme for high-value protein capacity and at Edendale for a new UHT cream plant.

Fonterra is also investing to future-proof operations with a new Whareroa coolstore and decarbonisation projects at multiple sites to secure energy supply and reduce emissions. The Co-op has announced new funding for farmers with lower emissions milk and expanded the Fixed Milk Price programme to provide more certainty around payments.

Forecast milk collections for the year are up 2.7% on last year to 1,510 million kgMS, following favourable pasture growth across most of New Zealand earlier in the season, though many parts of the country are currently experiencing very dry conditions. Looking ahead, Fonterra has increased its full-year forecast earnings range to 55-75 cents per share, reflecting the underlying strength of its core business.

 

Kiwi scientists lead breakthrough in plant disease detections

Kiwi scientists are playing a vital role in developing a revolutionary low-cost diagnostic tool that could significantly boost food crop production in developing countries.

Ministry for Primary Industries scientists from the Plant Health and Environment Laboratory are collaborating with researchers at Northwestern University in Illinois to create the PlantdX2.0 tool. The rapid test uses specialised chemistries to identify plant diseases, allowing growers to remove unhealthy plants early in the growing season.

Early prototypes have shown promising results in field trials both in New Zealand, where it detected virus infection in symptomless tomato plants, and in Kenya's Maseno area where beans, sweet potato and maize are staple crops.

PHEL Team Manager Virology and Phytoplasmology Jeremy Thompson says the test will be particularly valuable for growers in developing countries who lack access to conventional disease testing. These farmers often unknowingly propagate from diseased plants, significantly reducing crop yields.

The project, funded by a $1 million USD grant from the Bill and Melinda Gates Foundation, aims to produce a test similar to Covid RAT tests that farmers can use directly in the field. Now midway through the two-year trial, researchers are working to ensure the tool is both affordable to produce and simple for farmers to use.

While primarily designed to assist developing nations, Thompson says the technology could also benefit New Zealand farmers and growers by allowing them to test for specific viruses or diseases in crops. The research team is also exploring potential future applications in animal and human health.

 

Mixed fortunes for wool sales in both islands

The fortunes of wool markets diverged this week with North Island prices rebounding strongly while the South Island market experienced continued softening.

Yesterday’s PGG Wrightson’s North Island sale saw prices return to levels from four weeks ago, with an extremely positive tone in the sale room despite significant wool volumes. The market achieved an impressive 97% clearance rate. Second shear wools were particularly strong performers, with some Hawke's Bay and Central Hawke's Bay lines selling well above the three dollar greasy mark, drawing special praise from Steve Fussell, North Island Procurement and Sales Manager, for both growers and wool handlers involved.

Crossbred fleece prices increased across all categories in the North, with poor style wools showing the strongest gains at 8%. Second shear wool categories recorded significant price improvements between 4% and 10%, with 50-100mm length average style wool seeing the largest jump. The North Island Strong Wool Indicator continued its upward trend with good and average style second shear in the 50-100mm category reaching $3.97 and $3.71 respectively.

Meanwhile, the South Island sale, also held yesterday, saw further market softening across most wool types. South Island Auction Manager Dave Burridge reported that lamb's wool was most affected, particularly lots showing faults. The clearance rate of 80% reflects the more challenging market conditions in the South.

Most South Island crossbred fleece and second shear categories saw price decreases between 2% and 5%, with crossbred oddments dropping 5% to $2.85. Burridge emphasized that with the market swinging more towards buyers, prudent wool preparation is becoming essential to maximise grower returns.

 

Western North Island farmers elect new B+LNZ director

Andrew Stewart has unseated incumbent Scott Gower in the Beef + Lamb New Zealand Western North Island director election. The Rangitikei hill country farmer secured 4,233 weighted votes to Gower's 3,502 - a winning margin of 731 votes.

B+LNZ Board Chair Kate Acland welcomed Stewart to the board, highlighting his fresh thinking and future-focused approach as valuable assets to the organization's leadership. The election marks the end of Gower's six-year tenure representing Western North Island farmers.

During his time as director, Gower brought large-scale hill country farming expertise to the board and played a significant role in B+LNZ's strategic refresh and CEO appointment as Chair of the People & Culture Committee. He will be formally farewelled following the annual meeting next week.

Farmer participation in the election remained stable at just under 13 percent, despite this being the first year of online-only voting. Acland encouraged more farmers to engage with the voting process in future elections to ensure their voices are heard at the board level.

(Via email) 

North Island farmers scoop awards

 

Whangārei beef farmers Rob and Mandy Pye have taken out the Regional Supreme Award at the Northland Ballance Farm Environment Awards for their exceptional balance of profitability and environmental stewardship.

The couple's Mangere Falls Farm in Kokopu runs steers and bulls across 335 hectares, having expanded from initially leasing 160 hectares of Mandy's parents' farm. Rob, previously a teacher, learned beef farming from his father-in-law.

The Pyes also collected the Beef + Lamb New Zealand Livestock Farm Award, Norwood Farming Efficiency Award, and Northland Regional Council Water Quality Enhancement Award. 

And sticking with awards, Anthony and Danelle Kiff have been named Central Plateau Share Farmer of the Year at the region's Dairy Industry Awards.

The couple, who are contract milking on Tauhara North #2 Trust's 230-hectare Tokoroa property with 580 cows, believe the strength of their business lies in financial and capital improvements along with beneficial feed management. 

Anthony, who previously won the region's Dairy Manager of the Year in 2017, says the Awards provide excellent personal development and networking opportunities. 

Other major winners include Jas Singh Mander as Dairy Manager of the Year, who manages Pāmu Farms' 2000-cow Reporoa operation. The Dairy Trainee of the Year award went to Cameron George, a farm assistant on Richard Webber's 1000-cow Marotiri property.

The Central Plateau winners' field day will be held on April 3rd at the Kiffs' Tokoroa farm.

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