Monday, November 19, 2018
  Saputo CEO Expects Low Dairy Prices to Persist Amid Global Glut  

Saputo Inc. expects international dairy and cheese prices to remain low amid a global supply glut and lower demand from China.

“Right now there’s too much milk in the system,” chief executive officer Lino Saputo Jr. said Thursday on his company’s third-quarter earnings conference call. “I think it’s a matter of time before there’s a natural balance between the amount of natural solids that are produced and the growing demand in emerging markets.”

Milk prices have tumbled amid a global surplus and shrinking demand from such countries as China and Russia. Fonterra Cooperative Group Ltd., the world’s largest dairy exporter, cut its milk price forecast to a nine-year low in January.

Saputo expects international dairy and cheese prices to remain low throughout 2016 and into the first half of fiscal 2017, Saputo Jr. said on a conference call with analysts. While international pricing is going to be a challenge, the company has seen a boost in profitability in domestic markets in Argentina and Australia from foreign exchange gains and operating efficiencies, he said.

Benchmark Class III milk futures, a type used in cheese making, have declined 12 percent in the last 12 months to $13.93 a pound on the Chicago Mercantile Exchange. Cheese futures have declined 1.2 percent on CME in the past year.

Saputo said net income rose 13 percent to C$175.2 million ($127.5 million) in its fiscal third quarter, which ended Dec. 31. Excluding one-time items, earnings per share were 44 cents, higher than the 39-cent average of nine analysts’ estimates compiled by Bloomberg.

Source: Montreal Gazette


Posted on Thursday, February 11, 2016 (Archive on Thursday, February 18, 2016)
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