Wednesday, December 6, 2023

Tatua ahead of the rest

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Tatua has put daylight between itself and other dairy exporters by declaring earnings of $9.66/kg milksolids, from which it will retain $1.16 and pay its 107 supply farms a milk price of $8.50 for last season.
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It is the second-highest milk payout and was achieved on record annual income for the co-operative of $364 million, chief executive Brendhan Greaney said.

Tatua farmers received $2.15/kg more than Fonterra farmers and have enjoyed an average premium of $1.40 over the past decade.

However, comparisons with Fonterra are not useful because they are completely different companies, Greaney said.

The small co-op has to go back to 2013-14, that extraordinary year for international dairy prices, to find a comparable result.

In that season the earnings before tax were $136m and on 13.2m kilograms collected the result was $10.32/kg, of which it paid out $9.

In the 2019 financial year earnings were $140m and 14.5m kilograms milksolids were received, lower than the previous season because of extended, dry summer conditions.

Continued growth of value-add businesses provided improved revenue and the bulk ingredient product mix of caseinates, whey protein concentrates and anhydrous milk fat performed well despite mixed market conditions.

Greaney said the Tatuanui plant is configured to cope with 15m kilograms intake annually and farmers know what cow numbers will deliver that supply.

Already this season the milk collection has set a new daily record, on September 23, and total intake is 7% ahead of last year.

It remains to be seen if weather conditions in Waikato will provide a further surge in daily milk production in October.

The daily capacity of Tatuanui is governed by the optimum product mix for specialised ingredients because the value-add products are batch-processed from recombined and cream products.

The retention of $16.8m is for reinvesting in long-term environmental, financial and social sustainability including a new engineering support facility and a wastewater treatment system.

Debt gearing averaged 32% during the year and finished at 27%.

“While we remain optimistic in our outlook for dairy and the season ahead our optimism is tempered by continuing volatility in the global trade arena.

“In addition, uncertainty around emerging domestic policies on both climate change and freshwater management have real potential to undermine investment confidence,” Tatua said in a statement.

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