1 00:00:00,080 --> 00:00:01,960 Speaker 1: Tim Beverage and for Ryan Bridge now the host of 2 00:00:01,960 --> 00:00:02,960 Speaker 1: the Country Jamie McCay. 3 00:00:03,040 --> 00:00:05,840 Speaker 2: Good evening, good Eton, nice to chat. 4 00:00:05,960 --> 00:00:08,639 Speaker 1: Yeah you too. Hey, what's your take on the Fonterra result. 5 00:00:09,920 --> 00:00:12,479 Speaker 2: Well, I heard you talking to Miles. I hit him 6 00:00:12,520 --> 00:00:14,840 Speaker 2: on my show today. Look, I think the one thing 7 00:00:14,880 --> 00:00:18,720 Speaker 2: that it's worth emphasizing, and that is, you know, not 8 00:00:18,800 --> 00:00:21,040 Speaker 2: the milk price. It's pretty much locked and loaded at 9 00:00:21,120 --> 00:00:23,799 Speaker 2: ten dollars. They've narrowed the band down there, but the dividend. 10 00:00:24,320 --> 00:00:28,200 Speaker 2: So last week Fonterra came out and said it's shifting 11 00:00:28,280 --> 00:00:32,320 Speaker 2: its earning guidance per share to fifty five to seventy 12 00:00:32,360 --> 00:00:36,879 Speaker 2: five cents per share. From that, their dividend policy is 13 00:00:36,920 --> 00:00:41,000 Speaker 2: to pay sixty to eighty percent of that as a dividend. Now, 14 00:00:41,040 --> 00:00:43,159 Speaker 2: I did the mat on this one off on the 15 00:00:43,200 --> 00:00:45,239 Speaker 2: back of the envelope sort of mats. But I think 16 00:00:45,280 --> 00:00:47,680 Speaker 2: I'm not a mile away. This is a possible range 17 00:00:47,760 --> 00:00:52,120 Speaker 2: tim of thirty three to sixty cents per share as 18 00:00:52,159 --> 00:00:55,880 Speaker 2: a dividend. But the big difference is, as opposed to 19 00:00:55,960 --> 00:01:00,120 Speaker 2: other years, this is fully imputed, so the tax is 20 00:01:00,200 --> 00:01:03,440 Speaker 2: paid on it. This is a tax paid payment to 21 00:01:03,520 --> 00:01:06,160 Speaker 2: the farmers. Now if we were right at the top 22 00:01:06,200 --> 00:01:08,920 Speaker 2: of that band and Fonterra is performing pretty well, it's 23 00:01:08,959 --> 00:01:12,920 Speaker 2: sixty cents. They're shares were trading at about five bucks 24 00:01:12,959 --> 00:01:15,680 Speaker 2: when I looked the mid afternoon. Haven't lockd since, but 25 00:01:15,840 --> 00:01:20,399 Speaker 2: sixty cents tax paid on a five dollars share is 26 00:01:20,480 --> 00:01:23,640 Speaker 2: like a twelve percent tax paid yield or dividend. So 27 00:01:23,720 --> 00:01:26,600 Speaker 2: that's a very good return on top of your milk 28 00:01:26,640 --> 00:01:30,200 Speaker 2: price for the Fonterra farmers. The other interesting one that 29 00:01:30,319 --> 00:01:34,199 Speaker 2: he didn't mention for your listeners was the forecast milk 30 00:01:34,240 --> 00:01:39,720 Speaker 2: collections one point five one zero million kilograms of milk solids. 31 00:01:40,080 --> 00:01:42,800 Speaker 2: That's up two point seven percent across the board in 32 00:01:42,800 --> 00:01:46,160 Speaker 2: New Zealand despite the North Island drought. And all it means, 33 00:01:46,480 --> 00:01:48,960 Speaker 2: tim is that the farmers are doing the maths on 34 00:01:49,000 --> 00:01:52,080 Speaker 2: this one. They're running out of grass. It's getting very dry, 35 00:01:52,120 --> 00:01:55,360 Speaker 2: and like sawai kato taranaki, those sort of areas, they're 36 00:01:55,400 --> 00:01:57,400 Speaker 2: pumping it in the front end of the cow and 37 00:01:57,480 --> 00:01:59,800 Speaker 2: out the other end comes some poop and some milk 38 00:01:59,800 --> 00:02:02,800 Speaker 2: and tween times and that is just a mathematical equation. 39 00:02:02,920 --> 00:02:06,400 Speaker 2: It's working. So the farmers are feeding supplements to milk 40 00:02:06,440 --> 00:02:07,640 Speaker 2: their cows at ten bucks. 41 00:02:08,080 --> 00:02:12,560 Speaker 1: Hey, just quickly on the India possibility of a trade deal. 42 00:02:12,960 --> 00:02:15,200 Speaker 1: The government is sounding quite bullish about that, and of 43 00:02:15,200 --> 00:02:19,040 Speaker 1: course the dairies. The big question, are you quietly sort 44 00:02:19,080 --> 00:02:20,400 Speaker 1: of optimistic about this? 45 00:02:21,639 --> 00:02:24,440 Speaker 2: Well, I mean, India is the biggest milk producer in 46 00:02:24,440 --> 00:02:26,520 Speaker 2: the world. It produces, off the top of my head, 47 00:02:26,800 --> 00:02:30,200 Speaker 2: twenty four percent of the world's milk production. They're aiming 48 00:02:30,240 --> 00:02:33,160 Speaker 2: to get that up to thirty percent by twenty thirty. 49 00:02:33,480 --> 00:02:35,720 Speaker 2: I can't see them wanting to do a free trade 50 00:02:35,800 --> 00:02:38,960 Speaker 2: This is just me being slightly pessimistic a free trade 51 00:02:39,000 --> 00:02:41,480 Speaker 2: agreement on milk. But I think the real advantage for 52 00:02:41,560 --> 00:02:44,160 Speaker 2: US would be to get likes of a free trade 53 00:02:44,200 --> 00:02:46,400 Speaker 2: agreement on lamb. The Aussies have got one at the 54 00:02:46,440 --> 00:02:49,200 Speaker 2: moment that would be great for US. Beefs a bit 55 00:02:49,240 --> 00:02:52,240 Speaker 2: awkward with the sacred cow sort of thing happening in India. 56 00:02:52,280 --> 00:02:54,799 Speaker 2: And the other one is horticultures. Espree have just come 57 00:02:54,840 --> 00:02:58,519 Speaker 2: out with their new season forecasts. They've got a record crop, 58 00:02:58,639 --> 00:03:00,959 Speaker 2: really good payout. If we could get a key with 59 00:03:01,080 --> 00:03:05,320 Speaker 2: fruit and our apples into India, Tara free one point 60 00:03:05,360 --> 00:03:07,960 Speaker 2: four billion miles to chill on them. We would be 61 00:03:08,000 --> 00:03:09,120 Speaker 2: cooking with gas. 62 00:03:09,560 --> 00:03:12,400 Speaker 3: Gosh, that would be exciting, wouldn't it. Anyway, Hey, Jamie, 63 00:03:12,440 --> 00:03:14,799 Speaker 3: thanks so much for your time. That's Jamie. He needs 64 00:03:14,840 --> 00:03:17,640 Speaker 3: no introduction. It's probably me interesting needs to introduce myself. 65 00:03:17,760 --> 00:03:19,480 Speaker 3: He's the host of the Country. I'm Tim Beverage. And 66 00:03:19,560 --> 00:03:21,600 Speaker 3: in case you're reckon listening to that voicecound that doesn't 67 00:03:21,600 --> 00:03:24,119 Speaker 3: sound like Ryan. Who's in for Heather? Well, it's Tim 68 00:03:24,200 --> 00:03:25,359 Speaker 3: and for Ryan and for Heather. 69 00:03:26,120 --> 00:03:29,280 Speaker 1: For more from Heather Duplessy Allen Drive, Listen live to 70 00:03:29,400 --> 00:03:29,919 Speaker 1: news talks. 71 00:03:29,960 --> 00:03:33,120 Speaker 3: It'd be from four pm weekdays, or follow the podcast 72 00:03:33,240 --> 00:03:34,240 Speaker 3: on iHeartRadio.