Fonterra chief executive Theo Spierings said the volume to value of the co-op continues to drive its performance in the ingredient, consumer and food service businesses.

“Margins in most of our businesses are similar to last year, and we have moved an additional 350m liquid milk equivalent into higher-value products in the year to date.

“Consumer and food service volumes are greater; China in particular have grown by 40% in the period. We are on track to exceed our target of moving an additional 400 liquid milk units into higher-value products by year end.”

Volumes remain high

Better than expected autumn weather conditions resulted in more milk at the end of the season, which combined with higher milk prices is good news for the cooperative.

Spierings said: “The closing of the relative price gap between reference milk price products and non-reference products has reduced overall profitability in our ingredient business. We have continued to manage our costs tightly, with operating expenses for the nine months down by 4%.

“Efficiencies and improvements in working capital are ongoing and capital expenditure is in line with expectations and expected to reduce. Our gearing is forecast to be in the target range of 40% to 50% at the conclusion of the year.”

Fonterra chair John Wilson said the co-op is well placed to deliver through the rest of the year for its farmers.

“We are committed to delivering the best outcome for our farmer shareholders and unit holders,” he said.

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