Pizza cheese, cheesecake cream help Fonterra notch massive profit in tough times

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Source:

One News

Fonterra has had to produce things that make more money, like cheese for pizza, to achieve its massive profit in the face of a low global milk price.

The dairy giant has announced a 65 per cent increase in profit of more than $800 million for last year. 

Fonterra's huge profit to boost farmers, small towns and the rural economy
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The dairy giant announced a 65 per cent increase in profit, making more than $800m last year.
The dairy giant announced a 65 per cent increase in profit, making more than $800m last year.
Source: ONE News

It's welcome news for dairy farmers after a tough few years because the global milk price has been low. 

To get the $800 million profit, Fonterra had to look at things that make more money.

That includes producing products such as cheese for pizza and cream cheese for the cheesecakes sold in restaurants and fast food chains. 

Fonterra chief executive Theo Spierings says the more the company shifts to value-add ingredients to consumer food service, the more stable its results are going to be. 

ASB Rural Economist Nathan Penny says Fonterra needed this win. 

"This year is good. The milk tanker is starting to turn around performance wise. But it needs to continue. We need to see back-to-back results," he said. 

An already-promised increase in the farmgate milk price of 50 cents a kg has put a spring in some farmers steps.  

"I don't think we're out of it yet, it's a long way to go, but there is a light at the end of the tunnel and the optimism is starting to pick up," said Andrew McGiven of Waikato Federated Farmers. 

Mr McGiven says farmers will be able to shake off some debt. 

"It's going to help not only farmers but also the small rural towns, the rural economy. And then it flows on from there." 

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