Fonterra posts €110m loss
The largest dairy exporter in the world has released poor annual results amid declining profitability and leadership shake-ups.

New Zealand's largest milk processor, Fonterra, has published accounts showing a €110m net loss after tax for the 2018 financial year. According to local media reports, this is the first loss in the co-op's 17-year history.

The bad result results from a combination of falling profitability, with Fonterra's EBIT falling by 22% in the past year, and exceptional charges related to its overseas partners.

The co-op wrote €247m off the value of its Chinese subsidiary, Beingmate, and paid Danone €131m in compensation for a past food safety scare.

Rising costs

Chief executive Miles Hurrell reported rising costs across the business, from an increase in the farmgate milk price late in the last season – which he said was good to co-op members – to other ingredient, development and support costs.

"There are no two ways about it. These results are disappointing," he wrote in Fonterra's annual report.

The bad result are a consequence of falling profitability and exceptional charges

Chair John Monaghan added that "Beingmate's unacceptable performance over the year has been frustrating".

Fonterra also faced the departure of both its former chief executive Theo Spierings and chair John Wilson in the past financial year.

Royal warrant awarded to ABP subsidiary
The British royal household is a supporter of “closed loop” food chains, it would seem.

ABP Renewables Division, Olleco, has been granted a royal warrant by the Queen of England. Olleco operates a “closed loop” supply chain to supply the royal household with cooking oils and fats.

The closed loop in this case reduces carbon miles by using the return journey to take back used cooking oils. These are then processed at Olleco’s bio-refinery to create biodiesel.

Warrants are awarded as a mark of recognition to people or companies that have regularly supplied goods or services to members of the Royal Family for at least five years.

"This is a huge honour and we are delighted and proud to be recognised for our service, helping the royal household to tackle climate change,” Robert Behan, CEO of Olleco, said. “If we are to achieve the UN’s goal of keeping global warming below 1.5°C, every household, community, organisation and nation in the world has to change the way they operate."

Olleco has a network of 19 sites across the British Isles to supply a number of food and hospitality brands. The company supplies fresh oils and fats and takes back used oils, it also collects food waste, which is then converted to renewable energy and fed back into the national gas and electricity grids.

Image by Paul Michael Hughes

Olleco was formed by ABP Food Group in 2006.

Closed loop

The Glanbia-Kepak dairy calf to beef club known as the Twenty20 club includes a "closed loop" supply chain. All inputs to rear the calves in the group, such as fertiliser and meal, must be sourced from Glanbia.

This was questioned at the Oireachtas agriculture committee meeting on Tuesday this week. TDs asked whether it was anti-competitive to lock farmers into this closed loop.

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Listen: Irish food exports to China to hit €1bn soon – Creed
Aidan Brennan reports from the Bord Bia-led trade mission to China this week.

Irish agri-food exports to China will soon hit the €1bn mark, Minister for Agriculture Michael Creed said while visiting the SIAL food fair in Shanghai.

“Since 2010, the exports have gone from €200m to €800m and I think the billion mark is well within our reach in the short term,” Minister Creed told the Irish Farmers Journal. “Whether it is dairy, beef or pork, this is a really important market.”

However, he placed a caveat on that, in that regulatory requirements must be met to build a long-term export market in China for Irish produce.

Irish meat and dairy exporters attended SIAL along with Bord Bia. Trade wars with the US and a looming African swine fever crisis are going to upset the balance of trade between China and the rest of the world.

Minister Creed spoke to the Irish Farmers Journal about how this will impact Ireland:

On Wednesday, the minister and his officials will attend meetings in Beijing on the issue of meat plant export approvals. A number of plants are awaiting approval to export.

“In the longer term, the spec that is available to come into the market here as well is something we are looking to improve,” he said. “The pork sector at home has been on its knees for a substantial period, the pickup in the market will be sustainable in the Chinese market for the near future.”

The minister added that the shortage of protein due to African swine fever in China will not only benefit pork producers in Ireland, but demand will spill over into the beef sector.

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Bayer loses €1.8bn Roundup court case
A third jury in California has found the manufacturer of glyphosate-based herbicides responsible for causing cancer.

A US jury has ordered German-based chemicals manufacturer Bayer to pay €1.8bn in damages after finding that its Roundup herbicide had caused the cancers of an elderly couple.

A superior state court in California heard the trial following legal action by Alva and Alberta Pilliod, who testified that they had used the glyphosate-based herbicide for decades before both becoming ill with lymphoma-type cancers.

Arguments centred on insufficient warnings given to users of Roundup about its potential risks.

The product was then made by Monsanto, which has since merged with Bayer.

This is the third jury finding against the manufacturer in cancer cases in California. All are subject to appeal.

Environmental Protection Agency

Bayer said in a statement following the verdict that the latest verdict "conflicts directly with the US Environmental Protection Agency’s interim registration review decision released just last month, the consensus among leading health regulators worldwide that glyphosate-based products can be used safely and that glyphosate is not carcinogenic, and the 40 years of extensive scientific research on which their favorable conclusions are based".

The company added that Mr and Mrs Pilliod had long histories of illnesses known to be substantial risk factors for their cancers.

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