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interest.co.nz has a sister on-line publication agridata.co.nz which follows rural issues of interest to working farmers.

We are working to draw the two services closer together, and this project will be launched later in the year.

In the meantime, here is Agridata’s latest weekly review of farm-gate prices and price influencers.

Deer
The velvet market is in an awkward dilemma with Chinese demand unsatisfied for regrowth, spiker and manufacturing grades, but they show little interest in NZ’s heavier sticks.

To survive farmers have lifted stick weights substantially, and now a large portion of production is in the A and super grades.

Korea is the main market for these, and with recent demand flat, producers are having to be patient as the product is steadily sold, in a bid to maintain price, and build long term business.

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The average whole milk powder price achieved in Fonterra’s monthly online auction overnight was US$3,281 a tonne, up 0.8% or US$25 a tonne from the previous month. It is down 25% from the peak in July 2008 and up 79% from the low in July 2009.

This is unlikely to change the outlook for the Fonterra’s milk price forecast for the current season of NZ$5.70/kg milk solids or for the likely dividend of 20-30c/kg.

Here is Fonterra’s full statement below.
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Here are a selection of current stories from agridata.co.nz

Sex sorting technology could reap millions

A potential breakthrough in livestock semen sex sorting may add hundreds of millions of dollars to NZ’s dairy exports, reports Stuff. Androgenix, a new company based at Auckland University’s Institute of Biotechnology, has been developing for almost three years a cost-effective process for sexing semen.

Co-founder and part-time chief executive Brent Ogilvie said he’s hoping to confirm Androgenix’s technology works this year. If successful, Androgenix will be able to offer semen sex-sorting technology to livestock insemination companies that is relatively low cost but with high fertilisation rates two problems that have plagued others attempting to control the sex of livestock born.

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Watch a special Investing Report about Fonterra here

Watch on YouTube here

Fonterra has announced a 5 cent/kg of milk solid increase in its distributable profit forecast range for the current 2009/10 season to 40-50 cents/kg, but says it will leave the target dividend at 20-30 cents/kg, meaning it is increasing its targeted retention range by 5 cents to 10-30 cents/kg. (Update 1 adds video)

The forecast milk Price of NZ$5.70/kg for the current 2009/2010 season is also unchanged, which means the forecast total payout to farmers is not forecast to change

Fonterra Chief Executive Andrew Ferrier said the increase in the Distributable Profit range was driven mostly by gains from divestments, improved joint venture returns and lower funding costs through improved working capital.

Fonterra is moving to reduce its debt in the wake of the global financial crisis and is trying to raise capital from its farmer shareholders, either through retention of parts of the milk payout or by selling new shares.

Watch on our video home page here.

Watch on YouTube here.

Bernard Hickey details the key news in 90 seconds at 9am in association with the BNZ, including news that Fonterra has cut the size of its 6 year retail bond offer by NZ$150 million to NZ$100 million after Fonterra was able to raise further cash offshore.

Meanwhile property fund manager DNZ is in all sorts of strife after respected fund manager Simon Botherway left and it deferred its dividend. DNZ was borne out of funds built by Money Managers and Doug Somers Edgar.

Meanwhile, European leaders pledged overnight to help Greece get through its fiscal crisis as long as Greece was able to cut its deficit. This initially helped the Dow and other markets rally, but uncertainty remains over the detail and markets fell again in late trade as the crisis meetings continue.

Fonterra has cut the size of its new 6 year bond offer by NZ$150 million to NZ$100 million, saying it was able to raise money on international money markets at a “very attractive funding cost” to help pay for a maturing 300 million euro bond.

The offer will be open for 15 days from February 18 and Fonterra will accept up to NZ$50 million in over-subscriptions. It expects to announce the interest rate offered next Wednesday (February 17). The bond has an A+ credit rating from Standard and Poor’s and the minimum investment size is NZ$5,000.

Last February Fonterra announced plans for a NZ$300 million retail bond offering 7.75% over six years. It was swamped by demand from ‘Mum and Dad’ investors and expanded it to NZ$800 million, as we reported on February 5 last year. Fonterra announced plans for this year’s offer in January, indicating then it would be for up to NZ$250 million.

Fonterra’s farmer shareholders bought NZ$270.7 million of extra shares in late January, less than a third of those up for sale.

The prospectus for the retail bond offer is here.

Watch an investing report about this story our video page here.

Watch on YouTube here.

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