Fonterra boss blames soaring butter prices on global demand
Fonterra says the international market is pushing up butter prices the company has to reflect that in its returns to its farmer owners.
Photo:
Margaret Jaszowska for Unsplash
The head of Fonterra says he understands consumers' frustration about the price of butter, but the co-op has to deliver for farmers.
In its third-quarter update,
Fonterra's profit
for the nine months ended April rose 11 percent to $1.08 billion (or $1.16b excluding one-offs), driven by strong demand.
But the same demand has meant soaring prices for household
staples like butter
.
Recent Stats NZ data showed
food prices rising
at their fastest rate in more than a year, with butter prices up 65 percent.
Fonterra chief executive Miles Hurrell said prices were driven by global demand.
"We're a collection of 8500 small farmers and our job is to deliver for each of them," Hurrell said. "The international market is pushing these prices very high at the moment and our job is to reflect that in the returns that we give back to our farmer owners."
Hurrell said he understood consumers' frustrations.
"We hear that, we understand the situation that consumers here in New Zealand - and not just in New Zealand [but] globally are experiencing specifically around butter, but also starting to see that in other areas as well," he said.
"But ultimately, our job is to understand what the international market is doing and put our prices and products out there accordingly."
Fonterra's latest update indicated farmers could be in line for another bumper season, with the milk price forecast for the 2025/26 season at $10 per kilogram of milk solids, the same level as the current season.
However, Fonterra warned of global uncertainty, and kept the forecast range wide at $8 to $11 per kg.
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