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Speaker 1: Strong result from fon Terra yesterday, seven hundred and fifty

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Speaker 1: million profit beating expectations, up on last year, forecast milk

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Speaker 1: price up. Just don't mention the war. These are and

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Speaker 1: results and there's a lot of disruption in global markers

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Speaker 1: we will have to contend with on the second half.

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Speaker 1: John Stevenson, cheer Fonterra Cooperative Council, joins me this morning.

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Speaker 1: Morning John, Good morning Ryan. What's not to like with that?

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Speaker 2: Oh, not very much. That's certainly a really strong performance

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Speaker 2: from our cooperative Ryan, as he mentioned, both forecast farmgate,

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Speaker 2: milk price and earnings up and a good return for

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Speaker 2: farmers on the capital they've got invested in Fonterra.

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Speaker 1: Yeah, that inter and dividend. Would that be up there

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Speaker 1: with the highest certainly the.

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Speaker 2: Highest that I can find? Ryan, not willing to fully

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Speaker 2: commit to that. Will do a bit more work on that,

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Speaker 2: but in my research it's the highest that I can find.

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Speaker 1: Mainland. How much of the overall result yesterday was down

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Speaker 1: to mainland? In other words, how much will you be

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Speaker 1: missing out on once it's gone?

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Speaker 2: So the the mainland performance of Fonterra paying farmers in

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Speaker 2: additional sixteen cents per year in recognition of the performance

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Speaker 2: of Mainland, but it's important to note that you know

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Speaker 2: there's no retained earnings in that or depreciation emortalization. The

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Speaker 2: return on capital from that Mainland group was nine percent.

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Speaker 2: That's historically quite strong for that group. Ingredients returned eleven

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Speaker 2: percent and food service twelve point six percent, so strong performance,

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Speaker 2: that's still well behind the other two and groups within

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Speaker 2: the business.

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Speaker 1: I was reading about tip Top yesterday, just what's happened

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Speaker 1: to Tiptop since it was sold off and their earnings

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Speaker 1: trebled basically because it was sold to somebody who specializes

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Speaker 1: in that area and they can make more money out

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Speaker 1: of it. So probably the same will happen with Mainland,

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Speaker 1: I would assume, But it's just not an area that

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Speaker 1: Fonterra can get more juice out the leman of.

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Speaker 2: Yeah, and I think it's important that you actually you

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Speaker 2: recognize the expertise of different businesses and those consumer business

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Speaker 2: is a really capital intensive owners have to employ a

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Speaker 2: lot of capital in them. Fontira is a really big

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Speaker 2: business with a really successful ingredients and food service. It's

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Speaker 2: really hard in a co op to get to raise

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Speaker 2: capital to invest the appropriate amount across all three channels,

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Speaker 2: so we've been through quite the process on that, but

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Speaker 2: that's certainly acknowledge what you've said there right.

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Speaker 1: On a scale of one to ten, John, the war

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Speaker 1: how worried.

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Speaker 2: Our farmers are certainly certainly worried, and you know, who

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Speaker 2: knows how long this is going to last. For I

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Speaker 2: understand that Fontira has got a degree of concern around

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Speaker 2: the uncertainty, and obviously we export more than ninety five

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Speaker 2: percent of our product overseas, so it will have some

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Speaker 2: impact that. I think the key thing for us as

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Speaker 2: farmers is seeing what Fontira, how Fonterira deals with it.

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Speaker 2: We've got strong partnerships with Kata to make sure our

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Speaker 2: products get to market. But when you look at a

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Speaker 2: non farm level, things like fertilizer, fuel, maybe interest traits

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Speaker 2: as well, they'll have an impactor. You know, I was

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Speaker 2: talking to a contractor just down the road yesterday. They're

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Speaker 2: using one hundred and thirty thousand later the these l

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Speaker 2: a months, so it's pretty material impact on that small business.

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Speaker 1: John, appreciate your time this morning, John Stephenson sheer Fonterra

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Speaker 1: Cooperative Counselor.

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Speaker 2: For more from earlier edition with Ryan Bridge, listen, live

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