I am not trying to 'down ramp' WCB. It is very difficult to understand their business plan. WCB is in a very competitive market, the price decrease announced by Murray - Goulburn of farm gate milk prices will see a drop in milk production , if the dry weather condition persist milk production and supply to processors will be even more critical. All the milk processors are indication they need more milk in 2016- yet supply may decline.
Saputo paid it competitors Bega and Murray - Goulburn millions of $ buying them out of WCB. Bega are using the funds to lend to their producers to help farm improvements and equipment to increase milk production. Bega reports that this program increased milk production by 6% in 2015.
Bega , Murray - Goulburn , Fonterra and the many small producers are all strong competitors to WCB - which seem to be somewhat wedged in the market. How long will WCB continue operating at a loss!
WCB Price at posting:
$9.22 Sentiment: Hold Disclosure: Held
