Fonterra rival Open Country Dairy picks a fight with co-op over market rules | Ryan Bridge TODAY

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[00:00:01]Good morning.

[00:00:02]>> It's all about the weather if you want to know. A little bit about the weather, a little bit about China. So, yeah, some really good numbers. Um, bit of a surprise rebound in some of those. Uh, and as you mentioned, like those key the whole sales skim and and um and whole milk powders.

[00:00:15]Basically, China. They've got chocker of the old milk powder. So, they weren't really buying. And apparently, that's cuz, you know, their um property market's a bit flat, the demand's a bit flat. Your average Chinese consumer just isn't out going out for their um whipped cream or a cream cheese latte or whatever it is they have over there.

[00:00:31]>> So >> Cream cheese latte?

[00:00:33]>> Cream cheese macchiato. [laughter] Cream cheese beer even, apparently, I've heard.

[00:00:36]>> Actually.

[00:00:37]>> Actual.

[00:00:37]>> Cream cheese latte.

[00:00:39]>> Yeah.

[00:00:40]>> Yuck.

[00:00:40]>> Give it a go once.

[00:00:41]>> Ew. Okay. No, no, very good. But so But so all of that means, right, that demand is down.

[00:00:46]>> is down.

[00:00:46]>> But your But your Latin American and your Southeast Asians actually stepped in and that um picked things up. So, prices have been on the way down.

[00:00:53]There's a wee chart that I looked at that showed that sort of uh trend all across the last 12 months for that um whole milk price. And it's come down.

[00:01:00]It's bounced back up a bit. So, although we've recovered, still down a way, but it looks like we've sort of found a floor for now.

[00:01:05]>> What about volumes from the auction? Cuz that's always important, isn't >> Yeah, pretty pretty reasonable. Pretty reasonable volumes. And I guess you're seeing a lot of milk out of the northern hemisphere. But, to the weather point, you're starting to see the heat wave and some questions about whether that ongoing heat wave is going to start to crimp production at the back end of the season.

[00:01:21]>> And benefit us.

[00:01:22]>> We don't But mind you, we don't know about El Niño yet. We're still at the start of our season here. So, it's it's all still just to sort of to play for, really.

[00:01:28]>> Five brewing, staying on dairy.

[00:01:30]>> Five brewing between Fonterra and Open Country Dairy, uh 13% of the milk that New Zealand produces through Open Country. Fonterra 78%.

[00:01:38]>> There's a change of the rules coming.

[00:01:40]So, every sort of four or five years, the rules that created Fonterra basically get a look over. And the main competition, who are, you know, 13% Open Country, they pretty much export and do ingredients. They say the rules just get looser and looser, and that's basically leaving um us with a situation, they say, where are it gets looser in this latest review, uh, we'll wind up with just the two of them and a lot of smaller producers around the place, processors rather, won't be able to, uh, participate and that'll be bad for the farmers that want to try and supply and get a decent price. They say there'll be just too much strength here for Fonterra.

[00:02:13]Fonterra, everybody participates in this review, they will have a bit of a, uh, go, but I guess these guys have come out of the blocks a little bit early this time. They didn't like the language around this. They said that the the whole review's being framed as a discussion about red tape and cutting regulation and they're saying, "Well, you know, we're all for cutting red tape, but this is not red tape. This is necessary competition protection."

[00:02:33]Fonterra sold those, um, brands and so on. That was part of the package when they got these laws in place in the first place. That's gone now, so your argument for weakening things just isn't there. Interesting pushback and I guess [clears throat] it comes at a time when you've got a new CEO at Fonterra who said one of his top three priorities is fighting for milk, getting out there, getting up every driveway, trying to take supply off the competition. So, she's a real fighter on and I think the gloves are sort of coming off today.

[00:02:58]Yeah, you've got to do it fair and square, don't you? You do really. How are the numbers looking from last night?

[00:03:03]Uh, look, well, we're just about at the end of the trading day, uh, in the US, uh, and looking at the markets there.

[00:03:08]They're all in the green at the moment.

[00:03:10]They've all recovered quite nicely, I think there. There was a wee bit of a recovery in the chip trade, even though, uh, one of the big makers, uh, TSMC said they're going to start charging higher prices next year. I was just looking at our dollar cuz that's obviously a big part of, um, oh, crikey, we're going to see our dollar. We might Here we go.

[00:03:24]Here we go.

[00:03:25]>> Yep.

[00:03:25]>> Um, uh, that's I mean that's, um, trading up pretty nicely and the commodities prices really is the one you want to look to. Here's your oil, trading over 91 bucks US for the three.

[00:03:35]>> That's your Brent crude.

[00:03:36]>> That's your Brent crude and that is That's your war and that's your Houthis, basically. [snorts] >> Thank you very much, Garth, I think.

[00:03:43]>> Garth Bray with Business Desk Thanks to >> Mhm.