Fonterra boosts earnings forecast by up to 25 percent, golden run set to continue for beef prices, and Golden Shears champions dominate South Island competitions.

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Fonterra boosts earnings forecast by up to 25 percent

Fonterra has lifted its forecast earnings range by up to 25 percent while maintaining its record $10 per kilo of milksolids farmgate milk price. The dairy cooperative now expects full year earnings between 55 and 75 cents per share, up from its previous guidance of 40 to 60 cents for the year ending July.

The improved outlook comes as Fonterra prepares to release its interim financial results on March 20. Chief executive Miles Hurrell says the upgrade reflects the underlying strength of the cooperative's core ingredients business and resilience in its consumer channel.

Fonterra's consumer division has shown strong volume and margin growth while successfully recovering the higher farmgate milk price costs this season. This performance, combined with robust results from businesses in the divestment perimeter, has enabled the significant earnings forecast upgrade.

Fonterra's ability to increase earnings projections while maintaining the highest ever forecast milk price signals positive market conditions for the dairy industry heading into the latter half of the 2024/25 season.

 

Fonterra leaders begin investor roadshow for Mainland Group listing

 

Meanwhile Fonterra's plan to divest its consumer brands business is moving forward with top executives hitting the road to woo potential investors across multiple countries. Chief executive-elect René Dedoncker and CFO-elect Paul Victor are leading meetings with investors throughout New Zealand, Australia and Asia beginning this week.

The investor roadshow forms part of Fonterra's dual-track process to divest its consumer channel along with Australian and Sri Lankan businesses, while retaining its smaller Chinese consumer business and Saudi Arabian manufacturing facility. Fonterra CEO Miles Hurrell describes these meetings as a crucial step in testing the merits and potential value of an initial public offering alongside the alternative trade sale option.

Farmers remain central to the divestment decision, with Fonterra emphasizing that the chosen option will maximize long-term value for farmer shareholders. This includes securing the best return on capital, enhancing Fonterra's competitive advantage in ingredients and food service, and expanding international market access for New Zealand dairy products.

The newly-branded Mainland Group represents a substantial business opportunity with $4.9 billion in revenue and 916,000 metric tonnes of product sold during the 2024 financial year. With earnings before interest of $200 million, a 4% margin, 15 manufacturing sites and products sold in over 20 countries, the business offers significant scale for potential investors while promising to maintain a mutually beneficial partnership with Fonterra.

Mike Cronin, Fonterra's managing director of M&A and strategic divestments, continues to lead the internal process with Jarden, Craigs Investment Partners and JP Morgan providing external advisory services.

 

Golden run set to continue for beef prices

Farmgate beef pricing continues its golden run into early 2025, with returns expected to remain elevated throughout the year according to the latest Rabobank quarterly report. February prices sit well above five-year averages, driven by strong export demand and lower cattle inventory.

US demand will continue to dominate exports in the first quarter and throughout 2025, delivering strong returns for New Zealand producers. US imported beef prices for 95 CL bull rose to $12.66/kg in late February, more than 40% above the five-year average. Jen Corkran, RaboResearch senior agricultural analyst, says what makes this year unusual is pricing continues to sit above the spring peak with no decline yet observed.

The strength follows trends established in 2024 when the US became New Zealand's leading market by both volume and value. While total export volumes dropped 5% compared to 2023, the value remained steady at $4.394 billion. US export volumes increased 2% to 183,000 metric tons with a 16% jump in value to $1.848 billion, while China saw volumes decline 27% to just under 148,000 metric tons.

Pricing may be further supported by lower New Zealand beef production, likely down 5-6% on first quarter 2024 figures due to fewer beef calves reared two years ago. This local trend mirrors global projections, with worldwide beef production expected to contract 2% in 2025 after peaking late last year.

The major uncertainty for global beef markets comes from the new US administration. Recent tariffs on Mexico and Canada were implemented, then partially rolled back, with warnings about potential tariffs on imported food products. Any decisions made could disrupt trade flows into the US with likely spillover effects on global markets.

 

Puketoi farmer's first shot hits bullseye in regional final

Puketoi sheep and beef farmer James Robbie has won the East Coast FMG Young Farmer of the Year regional final on his first attempt. The 25-year-old newcomer outperformed experienced competitors at Masterton's Solway Showgrounds on the weekend, securing his place at the national Grand Final in Invercargill this July.

Robbie's victory came as a surprise even to himself, as he entered with no expectations beyond enjoying the experience. His relaxed approach proved effective against the pressure-packed environment where contestants faced intense practical challenges, technical questioning, and head-to-head competition modules.

The turning point came during the buzzer-style quiz section, where Robbie entered in second position but surged ahead by answering a strong run of questions correctly. This 30-point gain proved decisive in his eventual triumph over Dannevirke Young Farmers members Samantha Thomson and Connor Richardson, who placed second and third respectively.

In the primary school AgriKidsNZ division, Havelock North Intermediate students topped the field, while Napier Girls' High School claimed victory in the FMG Junior Young Farmer category. Both teams will join Robbie representing the East Coast region at the July finals in Invercargill, continuing the competition's 57-year tradition of identifying top talent in New Zealand's food and fibre sector.

 

Golden Shears champions dominate South Island competitions

Top shearers and woolhandlers have delivered standout performances at South Island competitions, with Taihape's Axle Reid finally securing his first major New Zealand Open win at Mayfield while Golden Shears champions continued their winning form at Cheviot.

Reid, who has been competing in the Open class since 2009, broke through for a significant victory at the Mayfield A&P Show in Mid-Canterbury. Despite previous international successes in Ireland and South Australia, Reid's best domestic result had been an Open invitation win at Golden Shears in 2018. His Mayfield triumph came by the narrow margin of 0.55 points over Mataura's Brett Roberts, who just a week earlier had reached his first Golden Shears Open final after more than a decade of trying.

Meanwhile at Cheviot A&P Show, Golden Shears Open woolhandling champion Joel Henare continued his remarkable run. Fresh from winning his 11th consecutive Golden Shears title in Masterton, Henare travelled from Motueka to claim his 143rd Open title. The competition also saw newly-crowned Golden Shears Junior champion Chardz Taylor delight the home crowd with another victory, mentored by her aunt Azuredee Paku, who finished second to Henare in the Open woolhandling.

Hugh De Lacy dominated the Cheviot Open shearing final, finishing 1 minute 33 seconds ahead of the next competitor and 8 points clear of runner-up Shaun Burgess. The competitions highlighted strong family connections in the sport, with Brett Roberts' brother Dre claiming the Mayfield Senior title and Justin Meikle's son Tye winning the Junior final.

The Mayfield competition also featured blade shearing, serving as the second round of New Zealand team selection for the 2026 World Championships. World Champion Allan Oldfield secured his first win since March 2023, finishing almost a minute ahead of World teams champion teammate Tony Dobbs to win by 3.31 points.

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