Donald Trump’s tariffs are having ripple effects here and everywhere.
Infometrics is drastically reducing its GDP growth forecast from 2.6% to just 1%.
Many economists now expect the Reserve Bank to go further with OCR cuts than previously forecast, in spite of a likely rise in inflation.
Fonterra Chief Executive Miles Hurrell told Mike Hosking there will be some kind of global slowdown.
He says it will start in the US, where consumers are already feeling the impact of the tariffs, but any slowdown in the world’s largest economy will ultimately be felt everywhere.
Speaker 1 (00:00):
We’ve got a bit of a mirroring room and movement
(00:01):
in the electricity sector’ve got a new retailer entering the market,
so we’ll talk about that very shortly. Meantime of twenty
three minutes away from the dairy auction, yesterday produced yet
another set of fairly positive numbers that to a degree anyway,
seemed to defy what might have been expected out of China,
where the terror of war has now become fascical. Of course,
the Frontier CEO, Miles Hurrell is back with us. Miles,
very good morning to you. Broadly speaking, Are you worried?
Speaker 2 (00:25):
I wouldn’t say worried, but it keeps on your toes.
You get up every morning to start to see what’s
happened overnight. But you know, we love this game we
had done for our whole career. So I guess so
ninety five of their product goes into international market. So
it’s not happened in one corner of the world, that’s
happening in another. So no, I wouldn’t say worried, but
but just just itways on our toes at the moment.
Speaker 1 (00:44):
We’ve got some good numbers out of China yesterday, but
that’s pre the shambles. What’s your expectation as to what
happens to China and how that impacts somebody like you.
Speaker 2 (00:55):
Well, I mean they’ve come out of that lull they
had a couple of years ago, so I think I
think we threw the worst of that. Now. What’s obviously
playing out in the international market now will sort of
soften things a little bit, we see, But because we’ve
come off a pretty low base, I think we’ve seen
still a prey robust position out of China and the
sort of that short to medium term, probably the bigger
question for us is that long term, what happens, you know, geopolitics,
(01:18):
the macroeconomic situation across the globe and does they have
a slow down degree where So that’s probably the pit
that we focused.
Speaker 1 (01:23):
On right now, which was my next question, What do
you think happens globally?
Speaker 2 (01:27):
Yeah, I do think there will be a slow down,
And excuse me, on the back of what’s going on here,
you can’t you can’t expect a sort of the US.
It will start in the US was what we’re predicting.
The consumers will feel at their first and they’re feeling
it now and so you can’t have the largest economy
in the world, slow down and not feeling everywhere, So
we’re bracing ourselves to that. But ye, at the same time,
you know, we’re in all corners of the world, as
(01:47):
I said earlier, and as a result, our jobs to
find the highest market, highest pay market tihed paying consumers
and you can get our products there.
Speaker 1 (01:54):
Let me come back to that specifically in a moment,
So infametrics this morning, say GDP, there we caon going
from two point four to one, exports close to zero.
Would you see that as a company or is that
for New Zealand and you can escape that somehow.
Speaker 2 (02:07):
Well, that’s from a New Zealand context, and of course
you only have to look back the last couple of
years and the economic situation across New Zealand and Frontier
and in fact that their industry has done pretty well.
So we’d see ourselves sort of pushing forward with that.
I mean, we can’t simply forward not to export and
continue to export. But from our perspective, as I say,
it’s about finding those markets that generate the returns and
(02:27):
going after it.
Speaker 1 (02:28):
So back to that, yeah, but back to that specifically,
how much can you shift and simply go, well, they’re
not looking good at the moment. I’ll go over here,
how real is that?
Speaker 2 (02:38):
Well, it has to. I mean you’re dealing with a
prod that comes out of a car at eleven o’clock
last night, it’s shipped into a factory this morning, and process.
I mean, you can’t hold on to the stuff, so
you have to The only thing that changes is the price.
When you get to supply, demand sort of gets out
of balance and price impacts. But you know, we spent
a lot of time the last few years been more
narrow in our focus, going after where we believe there’s
(02:59):
long term value and you know, things like that high
ingredients business in the US and despite having to pay
a little bit more in tariff, you know, the products
that aren’t generally made in the US, and so therefore
we don’t think at Olympic.
Speaker 1 (03:10):
Well, that’s what I was going to ask as well.
So that there was an argument came from the Prime
Minister the other day on this program. He was arguing,
I think I agree with him that a bottle of
serving on blanc at a dollar twenty more than it
was if you’re selling it Upper Eastside, New York doesn’t
make any difference. Can you do that with what you
do in.
Speaker 2 (03:26):
The markets that we sell into, so that high value
medical nutrition, high venue sports and active nutrition, we believe
we can sort of see our way through that. So
if you plan in the low end and the gallon
of milk and Walmart in California, you’re probably going to
be hit somewhat. But that’s not our game where it.
We’re in the high end sports and active and medical nutrition,
where you know, an extra ten percent of an ingredients
(03:49):
cost is actually quite small. On the grand scheming thing.
Speaker 1 (03:51):
The shipping. I’m looking at ships in China. They’re full,
they’re going nowhere. Does that lead to something problematic transportation wise? No?
Speaker 2 (04:01):
Again, you know, when you’ve been living and playing in
places like Nigeria and Senegal for a few bunch of
your Korea. I mean, what what goes on in China
now is nothing to compare to what we have to
deal with. Again, so I see our way through that.
I don’t. I don’t think you’re going to see ships
piled up. I mean I think that the Chinese are
pretty efficient at this. You may see some port conduced
in the short term, but they’ll clear. That’s one thing
that the Chinese is good as they don’t muck around
(04:22):
in these areas, so they’ll clear that relatively quickly. And
if products not moving, they ask people we export it.
I’m moving from those containers. But when you know when
food’s coming in, important suppliers are coming in, they’ll make
sure that happens. So there might be a short term
but but again we’ll see our way through that pretty easy.
Speaker 1 (04:38):
Last time we had you on the programming, you’re on
the road with the divestment thing. How did that go?
Speaker 2 (04:43):
Yeah? Good? You know, feedback from farmers as they understand
the why buy and large clearly we’re still of a
long way off as you’re going out and asking for
a vote, but no, overall they get it, they get
and it comes out to the conversation here now is you know,
they get where expertise is and it’s that high value
ingredients and that food service and consumers something that’s not
not our core strength. So they understand that and we’ll
(05:04):
get to that point at some point. Talk to avows
vote good stuff.
Speaker 1 (05:07):
You have a good long weekend. Appreciate it. Myles Horor
Frontier CEO eighteen minutes away from it for more from
the mic Asking Breakfast.
Speaker 2 (05:14):
Listen live to news talks it’d be from six am weekdays,
or follow the podcast on iHeartRadio
You can now read the most important #news on #eDairyNews #Whatsapp channels!!!
🇺🇸 eDairy News INGLÊS: https://whatsapp.com/channel/0029VaKsjzGDTkJyIN6hcP1K
