1 00:00:00,240 --> 00:00:02,679 Speaker 1: Jamie McKay is with us from the country. Jamie, good evening. 2 00:00:03,560 --> 00:00:04,200 Speaker 2: Gooday, Ryan. 3 00:00:04,400 --> 00:00:08,600 Speaker 1: Now we've got the Fonterra, you know, the downgrading, lowering 4 00:00:08,640 --> 00:00:11,719 Speaker 1: the fore cast farmgate milk price for the second time 5 00:00:11,760 --> 00:00:12,280 Speaker 1: this season. 6 00:00:13,280 --> 00:00:16,800 Speaker 2: Yeah. Yeah, Like, Well, to take you back a wee 7 00:00:16,800 --> 00:00:19,560 Speaker 2: bit in time, they started the season off with the 8 00:00:19,600 --> 00:00:23,800 Speaker 2: forecast range of eight to eleven dollars. Strangely, I mean, 9 00:00:24,120 --> 00:00:26,560 Speaker 2: logic would suggest the midpoints nine to fifty, but they 10 00:00:26,560 --> 00:00:30,600 Speaker 2: went with a ten dollar midpoint. They've had to subsequently 11 00:00:30,680 --> 00:00:34,199 Speaker 2: reduce that to nine fifty, and today they've changed that 12 00:00:34,360 --> 00:00:38,120 Speaker 2: midpoint from nine to fifty to nine dollars, so that 13 00:00:38,320 --> 00:00:41,520 Speaker 2: range is now eight point fifty to nine fifty. There's 14 00:00:41,560 --> 00:00:43,600 Speaker 2: quite a bit of talk in the industry about maybe 15 00:00:43,640 --> 00:00:46,760 Speaker 2: the milk price starting with an eight, which wouldn't be 16 00:00:46,840 --> 00:00:50,240 Speaker 2: so flash, but it's not a surprise. This follows yesterday's 17 00:00:50,240 --> 00:00:52,760 Speaker 2: and we talked about this one on Tuesday Evening, Ryan. 18 00:00:53,159 --> 00:00:55,880 Speaker 2: It follows yesterday's four point four percent drop on the 19 00:00:55,920 --> 00:01:00,200 Speaker 2: GDT auction down a whole milk powder down far five 20 00:01:00,240 --> 00:01:03,680 Speaker 2: point seven percent, the ninth drop in a row since 21 00:01:03,720 --> 00:01:06,640 Speaker 2: mid August. The record is ten. It looks like we 22 00:01:06,840 --> 00:01:09,880 Speaker 2: could well beat that when the first auction comes back. 23 00:01:10,000 --> 00:01:14,559 Speaker 2: In early January. Chief executive Miles Hurrell said, strong milk 24 00:01:14,600 --> 00:01:17,640 Speaker 2: flows in both New Zealand and globally, particularly out of 25 00:01:17,640 --> 00:01:21,160 Speaker 2: the United States and Europe, continues to put downward pressure 26 00:01:21,400 --> 00:01:24,440 Speaker 2: on global commodity prices. And the other factor that's slightly 27 00:01:24,480 --> 00:01:27,880 Speaker 2: coming into play is the stronger New Zealand dollar. It's 28 00:01:27,920 --> 00:01:31,679 Speaker 2: now training at fifty eight or US fifty eight cents. 29 00:01:31,959 --> 00:01:34,600 Speaker 2: It was at fifty six or fifty seven. But I'm 30 00:01:34,720 --> 00:01:39,640 Speaker 2: imagining the hedging department at Fonterra Ryan has probably got 31 00:01:39,680 --> 00:01:42,200 Speaker 2: to lock a lot of their currency locked in for 32 00:01:42,280 --> 00:01:45,560 Speaker 2: this season, so that may even be a next season story. 33 00:01:45,680 --> 00:01:49,080 Speaker 2: So Bucklin, I don't think we're over the drops yet. 34 00:01:49,080 --> 00:01:51,000 Speaker 2: But the good news is because it is Christmas and 35 00:01:51,040 --> 00:01:52,800 Speaker 2: I don't want to be a grinch. The good news 36 00:01:52,880 --> 00:01:56,160 Speaker 2: Ryan is as we look out further, we are expecting 37 00:01:56,200 --> 00:01:59,960 Speaker 2: this thing to come back and still very good future 38 00:02:00,120 --> 00:02:00,720 Speaker 2: for protein. 39 00:02:01,520 --> 00:02:04,720 Speaker 1: And that you know everyone talks about the break even price, Jamie, 40 00:02:04,800 --> 00:02:07,640 Speaker 1: eight dollars fifty is that I think the average four 41 00:02:07,720 --> 00:02:11,360 Speaker 1: farmers for dairy farmers that sounds like it's getting quite close. 42 00:02:11,960 --> 00:02:14,359 Speaker 1: Is you know that must be worrying or is there 43 00:02:14,400 --> 00:02:15,040 Speaker 1: more to that? 44 00:02:16,360 --> 00:02:19,200 Speaker 2: No, I think it's worrying. It's interesting the eight that's 45 00:02:19,280 --> 00:02:22,200 Speaker 2: the from the E contractor tracker at dairy and Z 46 00:02:22,360 --> 00:02:25,360 Speaker 2: eight fifty. I know a lot of dairy farmers, and 47 00:02:25,440 --> 00:02:28,440 Speaker 2: I know a lot of them whose cost of production 48 00:02:28,560 --> 00:02:32,399 Speaker 2: is considerably below eight dollars fifty. Maybe it's a few 49 00:02:32,400 --> 00:02:34,680 Speaker 2: of the big players with high debt that is dragging 50 00:02:34,720 --> 00:02:37,880 Speaker 2: that average up. But you're dead right, Like, at a 51 00:02:37,919 --> 00:02:40,160 Speaker 2: cost of eight to fifty a ten dollars payout, it 52 00:02:40,280 --> 00:02:42,960 Speaker 2: is a good business to be if that payout is 53 00:02:43,200 --> 00:02:45,440 Speaker 2: beginning with an eight and the cost of production is 54 00:02:46,080 --> 00:02:50,640 Speaker 2: eight fifty, not so flash. But there are things that 55 00:02:50,680 --> 00:02:53,040 Speaker 2: are mitigating this. I mean, lower interest rates are really 56 00:02:53,080 --> 00:02:57,160 Speaker 2: going to help farmers in the coming season or the 57 00:02:57,200 --> 00:02:59,359 Speaker 2: rest of this season. That has of course been factored 58 00:02:59,400 --> 00:03:03,360 Speaker 2: into the eight fifty. But yeah, watch this space a 59 00:03:03,400 --> 00:03:05,280 Speaker 2: bit of the shine coming off dairy prices. 60 00:03:05,480 --> 00:03:07,840 Speaker 1: I see Nathan Guyn has got a new role for himself. 61 00:03:08,800 --> 00:03:12,680 Speaker 2: Yes, he has the former Minister of Primary Industries under 62 00:03:12,720 --> 00:03:14,760 Speaker 2: the well he was under the Key and I think 63 00:03:14,800 --> 00:03:17,080 Speaker 2: the English government. I'll have to check my do my 64 00:03:17,120 --> 00:03:20,280 Speaker 2: homework on that one. Yeah, he is named as the 65 00:03:20,520 --> 00:03:24,680 Speaker 2: new Special Agricultural Trade Envoy. We've had some good ones 66 00:03:24,760 --> 00:03:27,919 Speaker 2: of these over the years. Mike Peterson for instance, comes 67 00:03:27,919 --> 00:03:32,280 Speaker 2: to mind. Nathan guy replaces hamishmah, a mid Canterbury arable 68 00:03:32,320 --> 00:03:35,480 Speaker 2: farmer who's held the role since twenty twenty three. Nathan 69 00:03:35,520 --> 00:03:38,400 Speaker 2: will take over on the first of January, which is 70 00:03:38,760 --> 00:03:41,320 Speaker 2: only a couple of weeks ago. Look, he's going to 71 00:03:41,480 --> 00:03:46,200 Speaker 2: with his background not only in politics, treading the corridors 72 00:03:46,200 --> 00:03:49,320 Speaker 2: of power, but also in farming. He's a practicing farmer. 73 00:03:49,320 --> 00:03:52,680 Speaker 2: He's a horror FANU a dairy farmer. He's an agribusiness leader. 74 00:03:54,200 --> 00:03:57,080 Speaker 2: He's the chairman of the Meat Industry Association at the moment, 75 00:03:57,120 --> 00:04:00,440 Speaker 2: he's also the independent chair for Appiculture. His Ellen, He's 76 00:04:00,440 --> 00:04:02,320 Speaker 2: got a finger and a lot of pies. He's very 77 00:04:02,400 --> 00:04:05,680 Speaker 2: well connected and he will do a very good job. Now. 78 00:04:05,720 --> 00:04:10,680 Speaker 2: Minister Maclay has said he wants Nathan to concentrate with 79 00:04:10,760 --> 00:04:14,000 Speaker 2: a particular focus on India. Obviously they're looking for the 80 00:04:14,120 --> 00:04:18,359 Speaker 2: FTA there and the GCC markets. Now. I don't know 81 00:04:18,400 --> 00:04:20,560 Speaker 2: about you, Ryan, but I know what a GC is. 82 00:04:20,600 --> 00:04:23,440 Speaker 2: I don't know what a GCC market is, but whatever 83 00:04:23,480 --> 00:04:25,360 Speaker 2: it is, Nathan's concentrating on it. 84 00:04:28,360 --> 00:04:32,280 Speaker 1: You're driving with the GC. Yes, no, quite right. Well, 85 00:04:32,320 --> 00:04:35,240 Speaker 1: he's he's quite adept, he used to. I've been on 86 00:04:35,279 --> 00:04:38,320 Speaker 1: a few trade missions with Nathan Guy in the years 87 00:04:38,320 --> 00:04:41,320 Speaker 1: gone by, Like we went to Brazil, we went to Argentina, 88 00:04:41,800 --> 00:04:44,800 Speaker 1: I remember going to Mexico. I mean, he knows his stuff. 89 00:04:44,880 --> 00:04:47,360 Speaker 1: He'll be out there pushing the business, doing the good 90 00:04:47,360 --> 00:04:49,400 Speaker 1: thing for New Zealand. So that's great. Jamie, appreciate it. 91 00:04:49,440 --> 00:04:52,239 Speaker 1: Jamie mckaiy, Host of the Country. For more from Heather 92 00:04:52,320 --> 00:04:55,320 Speaker 1: Duplessy Allen Drave, listen live to News Talks. It'd be 93 00:04:55,480 --> 00:04:59,360 Speaker 1: from four pm weekdays, or follow the podcast on iHeartRadio.