The Country 18/03/26: Mike McIntyre talks to Jamie Mackay

Oh, welcome back to the country. I don't know what happened to GCJ then.

She went missing on me, but I've got a, and I've also got from Jardin,

head of derivatives, dairy analyst. I was going to say Miles Hurrell.

That's a Freudian slip. Let's try Mike McIntyre.

Mike, we might start with Miles. Do you think Winston's being a bit uncharitable,

sort of slamming him for taking the money and running?

Yeah, just for slamming with the first place, I think he's done a fantastic job.

So, but no surprise, though, I don't guess. And even if this is an opportunity, does he?

So, power for the course.

Yeah, we wish Miles Hurrell all the best. I'm still hearing rumours, mind you.

I got it wrong with Porol Yolo, Wayne Langford. He's on the show a bit later in the week

about standing in West Coast Tasman. Although I do know there will be some interest in candidates there.

I'm hearing Miles may still be interested in New Zealand rugby. That's out of the frying pan

into the fire. It wouldn't be without its challenges, but if anyone's good for their job,

it's perhaps something. I think he'd be great. He's good for New Zealand rugby,

between him and David Kirk. They would tidy it up, a couple of smart business people.

Right, let's have a look at that. Global dairy trade auction overnight made it six in a row,

only up 0.1% whole milk powder, down 4%. What's with skim milk powder? We can't get enough of it.

That's right. I think that's actually quite favorable for the outcome for the rest of the season

as well, because if you have a look at the combination of skim and butter or even skim and aim,

if they both outperform whole milk powder returns quite substantially. To see skim hold its own,

especially at this time of the year where the big northern hemisphere sellers come online,

it's good for New Zealand dairy, I think. All this is happening amidst a backdrop of this

economic and trade turmoil almost around the world and a bit of a glut, certainly a good supply

of dairy products. We're effectively with these prices swimming against the tide.

We are, but the world has changed in terms of what everyone's producing. On the

States, in the last couple of years, they've introduced another 9 billion in processing assets to

really capture that protein seam. In the States now, in stacking bars and convenience foods,

everything's got added protein. The fascination with protein hasn't been missed by the dairy

industry over there. Rather processing milk into skim milk powder, which is basically the core

ingredient, or the base ingredient, they're finding higher returns for the milk. As such,

we've seen a constraint in terms of the amount of skim they're able to send into the market.

I think New Zealand's really benefited from that. We had a good run last night, obviously,

prices well up and certainly introduced that premium again over European products,

but we're trading in a discount to US skim prices, which is typically doesn't happen.

Yeah, we're trading at it, because you threw the numbers at me, you said,

I equated them to hear the dupler cell, and we're trading at quite a discount to the Chicago

mercantile, whatever it's called. The CME, the Chicago mercantile exchange, yeah.

I nearly got it. Yeah, no, you were there. Yeah, essentially, a dollar-ade

to your pound, it was this morning on their value auction, which translates into close to $4,000

a ton, and as you said, we're about $35, I think, and probably a little surprising,

skim milk powder is trading only a small discount to home milk powder, and essentially then,

for you're not valuing the true amount of the fat return. So you'd rather put money,

the fatten to sorry, and to AMF and butter and get a better return in process for the milk

and to home milk powder at the time of year. We must be getting close to a stage in the season,

Mike McIntire, where effectively we've locked down this season's payout. When do we kind of

get past the peg in the sand on that one? Well, certainly by the end of next month,

so certainly by the end of April, you've got a pretty good idea in terms of what it's going to be,

but as you say, we're getting pretty close to knowing what it is. I think the low-end,

the Fonteurans current guidance at 920 is probably in the revision mirror now. I think probably

950 is looking like more like a minimum, and certainly the futures are same at to us,

but yeah, give us another few weeks, we're a couple more GDT events, and we'll have a

pretty good idea on the number, I think. So where are the futures serving at for 2627?

2627 seasons last at 963. I think probably they we can attach this one in just in terms of the

dependence on Hommel powder for that price, and obviously that was a disappointing result.

Mainly, again, on the result of China, not 2D up to the auction, typically they're by well

over half of the Hommel powder scamming butter, and they were well down on both Hommel powder and

butter, and only 5.5% of the scam. So that's probably the one concern I take out of that auction,

just the stepping back of their demand, which has obviously been key to the success of the

New Zealand season otherwise. Have you got a keen to wage, or has it, I guess, as to who the next

Chief Executive Fonterra might be, if it was an internal appointment? I'm not up to speed in

who the can. Well, you're into the futures markets, surely you can give us something.

Well, I'll try my own head in the name, and name in the hatchery, you know, I'd be with

look on the other side of the coin, yeah. Yeah, well, 6 million bucks, why wouldn't you?

Okay, Mike McIntyre out of Chardon. Thanks to your time. Always appreciate it.