Terrible news for the 523 Fonterra workers who are losing their jobs – I’m sure everyone here at The Standard wishes them well.
Fonterra axes 523 jobs in a bid to cut $60m in costs
Fonterra has cut 523 jobs as the company tries to reduce its payroll bill by up to $60 million a year.
Chief executive Theo Spierings said the news had been unsettling for the people affected but the co-operative had to change if it was to remain strongly competitive in the global dairy market.
Speaking of the global dairy market:
Kiwi dollar falls as dairy prices plunge at latest auction
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The latest GlobalDairyTrade auction was a shocker, the GDT price index dropping by 10.7 per cent from the last sale a fortnight ago and with wholemilk powder prices registering their biggest fall in 12 monthsWhole milk powder – which is responsible for about 75 per cent of Fonterra’s farmgate milk price – fell in price by 13.1 per cent to US$1,848 a tonne to its lowest level in six years.
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AgriHQ dairy analyst Susan Kilsby said the auction result was “disastrous”. “Farmers now face two consecutive seasons of extremely low milk prices,” she said in a commentary. “The majority of farmers can’t break-even at such a low milk price.”Economists estimate a $1/kg drop in the milk price equates to about $2 billion less income for dairy farmers. “Farm debt levels will rise. Rural communities will suffer as farmers reduce spending to the bare essentials,” Kilsby said. …
The current job losses may well be just the beginning.
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