Source: Porirua City Council
Results – Fonterra announces 2025/26 Farmgate Milk Price, continued strong FY25 earnings
· Normalised1 profit after tax: NZ $1,158 million, up 11%
· Normalised continuing earnings per share: 70 cents per share, up 13%
· Return on capital: 11% down from 11.9%
· FY25 full year forecast earnings range: 65-75 cents per share
· 2024/25 season forecast Farmgate Milk Price: $10.00 per kgMS
· 2025/26 season opening forecast Farmgate Milk Price: $10.00 per kgMS.
Fonterra Co-operative Group Ltd today provided its Q3 business update, announcing strong profit after tax of $1,158 million, up $119 million on this time last year.
As a result of these strong earnings, the Co-op narrowed its year-end earnings range to 65-75 cents per share, at the upper end of the guidance provided in March of 55-75 cents per share.
At the same time, Fonterra announced an opening forecast Farmgate Milk Price for the 2025/26 season of $10.00 per kgMS, driven by stable near-term market demand.
CEO Miles Hurrell says Fonterra is committed to delivering strong shareholder returns through both earnings and the Farmgate Milk Price.
“We’ve delivered strong shareholder returns through FY25, including a 22-cent interim dividend, and as we get closer to the end of the year, we are focused on maintaining this momentum.
“Our forecast Farmgate Milk Price for the current season is driven by strong demand for our milk price reference products and our range is unchanged at $9.70-$10.30 with a midpoint of $10.00 per kgMS. We’re also pleased to tighten our year-end forecast earnings within the existing range, given the strength of our third quarter performance,” says Mr Hurrell.
2025/26 season opening Farmgate Milk Price
“Looking at the season ahead, we expect this demand to continue for now, but we acknowledge the ongoing geopolitical uncertainty and the potential for a wider series of outcomes across the season.
Therefore, our opening forecast Farmgate Milk Price for the 2025/26 season of $10.00 per kgMS sits within a wide forecast range of $8.00-$11.00 per kgMS.
For the current season, the milk price of $10.00 per kgMS equates to around $15 billion into the New Zealand economy. The majority of this flows into regional New Zealand where it plays a strong role helping to sustain local communities.
Business performance
Fonterra’s focus on optimising its product mix has driven a Q3 normalised profit after tax of $1,158 million, equivalent to 70 cents per share, with operating profit of $1,740 million, up $267 million on last year.
“This result reflects the scale and ongoing strength of our Ingredients channel, and volume growth in our Foodservice and Consumer channels with each channel increasing its third quarter performance compared to the same period last year.
“Our rolling 12-months Return on Capital is 11%, which is above our previous target for FY25 and within our long-term target range of 10-12%,” says Mr Hurrell.
“Our full year forecast earnings range of 65-75 cents per share assumes flat earnings in Q4 of FY25 due to the seasonality of our milk collections, the higher input prices for our Consumer and Foodservice businesses, ongoing investment in our ERP system and an increase in costs associated with shaping the Co-op post divestment to execute our strategy.
“We are heading into year end with a strong balance sheet and full year debt metrics on track to be below the Co-op’s target range,” says Mr Hurrell.
Strategic delivery
Miles Hurrell says a priority for Fonterra this year has been the implementation of its strategy, which deepens the Co-op’s focus on its high-performing Ingredients and Foodservice businesses.
“Last year, we announced a step-change in our strategic direction, including a decision to divest our global Consumer and associated businesses.
“This step was grounded in an understanding of how we best create value for farmer shareholders and ultimately for New Zealand.
“We have been thoroughly testing the terms and value of both a trade sale and initial public offering (IPO) as divestment options. This work is on track as planned and we will seek farmer shareholder approval to divest through a vote in due course.
“Given the confidence we have in our strategy, we have strong conviction that a divestment is the right choice for the Co-op and its owners.
“Our financial results show we have an impressive business as a global B2B dairy player, powered by our home-base of New Zealand milk and operations.
“If we divest our Consumer business, we will still be a Co-op with global reach and scale, and a diverse product mix sold to customers in more than 100 countries.
“By focusing on our core strengths and the sales channels that deliver the highest returns, we have the confidence to target an average Return on Capital of 10-12%, which is above our 5-year average. This is alongside paying farmers the highest sustainable Farmgate Milk Price, which we are always committed to,” says Mr Hurrell.
Fonterra continues to target a significant capital return to shareholders and unit holders following divestment.
1 Normalised profit after tax excludes $77 million of costs associated with the divestment of the Consumer channel integrated businesses in Australia and Sri Lanka.
About Fonterra
Fonterra is a co-operative owned and supplied by thousands of farming families across Aotearoa New Zealand. Through the spirit of co-operation and a can-do attitude, Fonterra’s farmers and employees share the goodness of our milk through innovative consumer, foodservice and ingredients brands. Sustainability is at the heart of everything we do, and we’re committed to leaving things in a better way than we found them. We are passionate about supporting our communities by Doing Good Together.
Animal Welfare – Proposed welfare code betrays animals and the law – SAFE
Source: SAFE For Animals
- The Ministry for Primary Industries is accepting public submissions on the Sheep and Beef Cattle Code of Welfarefrom May 14 – July 15, 2025.
- In July 2023, following multiple complaints on the integrity of codes of welfare, the Regulations Review Committee recommended a prompt and substantive review of the process for developing secondary legislation under the Animal Welfare Act.
Consumer NZ – New Zealanders have rising concerns about insurance costs as financial pressures mount
New insights reveal insurance is a growing financial burden for New Zealand households, as trust in the industry dips and climate pressures loom.
Insurance has jumped to the fourth most significant financial pressure for households, behind housing, food and household debt, marking a notable rise from sixth place in October 2024. This shift reflects a growing sense of strain as premiums continue to climb across house, contents, car and health insurance.
At the same time, trust in the insurance industry is falling, based on results of the latest Consumer NZ Sentiment Tracker survey of more than 1,000 New Zealanders.
“Insurance is meant to provide a safety net, but for many people, it’s becoming increasingly difficult to access. When you add the complexity of policies and the lack of transparency, it’s easy to understand why trust in the industry is falling,” says Rebecca Styles, Consumer investigations team leader.
Insurance affordability now in focus
Consumer’s upcoming report on house and contents insurance will delve deeper into these issues, exploring how rising premiums are affecting consumers’ ability to access appropriate cover. With the effects of climate change increasing risk and, in turn, premiums, more New Zealanders are feeling financially exposed.
“We’re hearing more and more from consumers who feel they’re being priced out of essential cover,” Styles says.
Interestingly, this comes as climate change concerns are cooling. Fewer New Zealanders now rank climate change as one of the top three most pressing issues — now at 12% (down from 15% in January and 17% a year ago), as more immediate pressures take priority.
Cost of living still top concern
The cost of living remains the number one issue for New Zealanders, with 65% of respondents identifying it as their top concern – a new high. Financial pressures across housing, food, debt and now insurance continue to weigh heavily.
Trust in the insurance sector drops
As premiums rise, trust in the insurance sector has taken a hit. More people now say they distrust insurers than trust them – a reversal from previous sentiment tracking and part of a broader decline in trust across sectors such as healthcare and energy.
Consumer warns that the decline in trust signals a need for the insurance industry to do more to demonstrate value, transparency and fairness in its offerings.
Climate risks compound affordability issues
With climate change increasing the frequency and severity of weather events, insurance affordability is a growing concern. Many New Zealanders living in high-risk areas are already facing pricier premiums or are being denied insurance altogether.
“Our upcoming report will highlight how the affordability of house and contents insurance impacts resilience in Aotearoa,” Styles says.
Notes
The Consumer NZ Sentiment Tracker is a quarterly nationally representative survey of 1,000 New Zealanders. It provides a snapshot of public opinion on key consumer issues, including financial wellbeing, trust in institutions and sector-specific sentiment.
The winter issue of Consumer magazine has a focus on insurance and will be on newsstands Monday 9 June 2025.
Health – Pressure on addiction treatment services highlighted
Source: Te Hiringa Mahara – Mental Health and Wellbeing Commission
Health – Statement on "run it straight" from the Royal Australasian College of Surgeons Aotearoa New Zealand Trauma Committee
The Aotearoa New Zealand Trauma Committee of the Royal Australasian College of Surgeons expresses profound concern regarding the increasingly prevalent informal activity known as “run it straight.” This practice, characterised by two players charging directly at each other in a high-speed collision, poses significant risks to participants, leading to severe injuries and, tragically, fatalities.
We call on everyone who can influence this activity to:
- raise awareness so participants understand the potential for serious injuries and the long-term consequences of high-speed collisions,
- support regulatory measures such as medical evaluation, age restrictions and safety protocols to minimise risks,
- promote safer alternatives for fundraising events that do not involve high-risk physical competition,
- encourage educational about the risks, and help young athletes protect their health, and
- engage healthcare professionals to provide valuable insights into injury prevention and help inform public policy decisions.
Recent tragic events, including the death of a young man during a “run it straight” challenge, have brought the dangers of this practice into focus. This incident is not an isolated case; it highlights a broader issue within both organised and informal sports where the emphasis on toughness and bravado can lead to reckless behaviour. The glorification of head-on collisions as a measure of strength is outdated and harmful, particularly for youth and young adults who may feel pressured to participate in these dangerous activities to prove their worth or bravery.
The biomechanics involved in “run it straight” significantly increase the risk of serious injuries, including concussions, cervical spine injuries, and long-term neurological damage. Unlike controlled tackles within the framework of regulated gameplay, this practice lacks tactical purpose and amplifies the potential for high-impact forces that can result in catastrophic consequences. The repetitive head trauma associated with such collisions poses a well-documented risk for developing chronic traumatic encephalopathy (CTE), a degenerative brain disease increasingly recognised among athletes in contact sports.
The environment in which “run it straight” typically occurs – often informal, unsupervised and unregulated – further compounds the dangers. Most of these events happen outside of structured sporting contexts, frequently in casual settings where safety protocols are absent. This lack of regulation exposes participants to unnecessary risks and highlights the urgent need for action from the broader community, including parents, coaches, schools and sporting organisations.
To combat the rising trend of dangerous practices like “run it straight,” the Aotearoa New Zealand Trauma Committee of the Royal Australasian College of Surgeons calls upon all stakeholders to take immediate and concerted action:
Raise awareness: public health campaigns must educate individuals, especially young athletes and their families, about the dangers of participating in “run it straight” and similar activities. It is crucial that participants understand the potential for serious injuries and the long-term consequences of high-speed collisions.
Support regulatory measures: we advocate for the establishment of clear guidelines and regulations governing informal and organised sporting events. This includes mandatory medical evaluations for participants, age restrictions and well-defined safety protocols to minimise risks.
Promote safer alternatives: charitable organisations and community groups should seek safer alternatives to fundraising events that do not involve high-risk physical competition. Engaging communities in activities that encourage fitness and camaraderie while prioritising safety is essential.
Encourage educational initiatives: educational institutions and sports organisations must incorporate discussions about the risks associated with “run it straight” into their curricula and training programs. By promoting a culture of safety and informed decision-making, we can help young athletes understand the importance of protecting their health.
Engage Healthcare Professionals: collaboration with healthcare professionals is vital to advocate for participant safety in all forms of sports, including informal activities. Their expertise can provide valuable insights into injury prevention and help inform public policy decisions.
“Run it straight” represents an alarming trend that requires immediate attention from all associated parties. We urge stakeholders to prioritise safety and foster a culture that values wellbeing over reckless displays of toughness.
About the Royal Australasian College of Surgeons (RACS)
RACS is the leading advocate for surgical standards, professionalism and surgical education in Australia and Aotearoa New Zealand. The College is a not-for-profit organisation that represents more than 7000 surgeons and 1300 surgical trainees and Specialist International Medical Graduates. RACS also supports healthcare and surgical education in the Asia-Pacific region and is a substantial funder of surgical research. There are nine surgical specialties in Australasia being: Cardiothoracic Surgery, General Surgery, Neurosurgery, Orthopaedic Surgery, Otolaryngology Head and Neck Surgery, Paediatric Surgery, Plastic and Reconstructive Surgery, Urology and Vascular Surgery. www.surgeons.org
Banking – ASB cuts interest rates
ASB’s Executive General Manager Personal Banking Adam Boyd says, “As the easing interest rate cycle continues, we are maintaining support for our customers with lower lending rates. Our variable loans are held by nearly 150,000 New Zealanders across personal, business and rural lending and these rates are the lowest they’ve been in more than two years.”
“We carefully consider the impact rate reductions have for all our customers. Today’s response to the OCR will bring relief to households and businesses while acknowledging the needs of our savers by not passing on the full 25 basis point cut to our savings products,” says Mr. Boyd.
ASB’s Housing Variable Rate will drop 20 basis points from 6.64% to 6.44%, while Orbit Variable will move from 6.74% to 6.54%. ASB’s Business Base Rate will drop 25 basis points from 11.77% to 11.52% while its Rural Base Rate will also drop by 0.25% from 9.01% to 8.76%.
In response to the OCR decrease, ASB is lowering some of its savings products, including Savings On Call and Headstart, by 20 basis points.
|
Home Loan* |
Current Rates |
New Rates |
Rate Change |
||||
|
Housing Variable |
6.64% |
6.44% |
– 0.20% |
||||
|
Orbit Variable |
6.74% |
6.54% |
– 0.20% |
||||
|
Back My Build |
4.19% |
3.99% |
– 0.20% |
Note – Back My Build applications are no longer open to new customers.
|
Business Loan* |
Current Rates |
New Rates |
Rate Change |
||||
|
Business and Rural Floating Base Rate |
4.94% |
4.69% |
– 0.25% |
||||
|
Business Base Rate |
11.77% |
11.52% |
– 0.25% |
||||
|
Rural Base Rate |
9.01% |
8.76% |
– 0.25% |
||||
|
Corporate Indicator Rate |
6.18% |
5.93% |
– 0.25% |
||||
|
Special Purpose Base Rate |
4.75% |
4.50% |
– 0.25% |
*These changes are effective from Thursday 5th June 2025 for both new and existing customers.
|
Savings |
Band |
Current Rates |
New Rates |
Rate Change |
|||||
|
Savings On Call & ASB Cash Fund* |
All Balances |
0.90% |
0.70% |
– 0.20% |
|||||
|
Savings Plus** |
No Bonus |
0.70% |
0.50% |
– 0.20% |
|||||
|
Partial Bonus |
0.80% |
0.60% |
– 0.20% |
||||||
|
|
Full Bonus |
2.90% |
2.70% |
– 0.20% |
|||||
|
Headstart* |
All Balances |
2.90% |
2.70% |
– 0.20% |
*These changes are effective from Friday 6thJune 2025 for new and existing customers.
ASB has practical information for customers on the current interest rate environment available on its website as well support to help customers take control of their financial wellbeing and achieve their goals at its Financial Wellbeing Hub.
Environment – Antarctic footprint clean-up challenges – How a remote Antarctic base clean-up protected one of Earth’s clearest lakes
Source: NIWA
Health and Employment – Auckland theatre nurses begin one-month on-call strike
Source: New Zealand Nurses Organisation
Economy – The lowering of the OCR by 0.25% to 3.25% is welcome news – FMAANZ
May 28, 2025 – Comments from Leigh Hodgetts, country manager, Finance and Mortgage Advisers Association of New Zealand (FAMNZ)
RBNZ interest rate decision – “The lowering of the OCR by 0.25% to 3.25% is welcome news to borrowers and potential home owners across New Zealand.
Finance and Mortgage Advisers Association of New Zealand members have reported a steady stream of first home buyers entering the market and the news today will bring more comfort to Kiwis as they take on new mortgages.
Banks have started to factor in the lowered rates before the announcement today.
Both 1-2 year and 3-5 year fixed term rates are looking attractive as an option to the regular short term view.
Floating rates are still popular as borrowers gamble to see if we have reached the lowest rates for 2025.
This move today may encourage Kiwis to review their loans. As always we recommend you speak with a mortgage adviser to work out the best structure for your own mortgage that will reflect your personal circumstances.”
