Fonterra hikes milk payout by 60c
Dairy co-operative Fonterra is increasing its forecast payout for the current season by 60 cents per kg of milksolids to $7.90 to $8.00.
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Dairy co-operative Fonterra is increasing its forecast payout for the current season by 60 cents per kg of milksolids. The new payout level is $7.90 to $8.00.
The payout was previously forecast at $7.30 to $7.40 per kilogram of milksolids.
The forecast payout incorporates a forecast milk price of $7.50 per kilogram of milksolids - 60 cents higher than the previous forecast - and a 'distributable profit' range for the 2011 financial year of 40-50 cents per share.
Fonterra, which is freezing wholesale local milk prices this year to soften the effects of rising international dairy prices, said it has reduced the target dividend range to 25-30 cents per share (previously 25-35 cents per share).
That means a 100% share backed farmer will receive, on a cash basis, a total of $7.75-$7.80, with the balance of Distributable Profit being retained by the Co-operative.
Based on last year's production figures, the increase translates to approximately $1 million in cash flow for a dairy farmer running the average-sized herd.
Fonterra chairman Sir Henry van der Heyden said the latest increase in the forecast Milk Price reflected further strengthening of international dairy prices over recent months.
“This significant Milk Price increase is welcome news indeed for Fonterra farmers, many of whose farm businesses remain under pressure after several challenging years and a current season marked by some difficult weather conditions. It’s also good news for the New Zealand economy and underlines the importance of dairying to New Zealand’s ongoing prosperity.”
Chief executive Andrew Ferrier said higher dairy market prices appeared to be driven by a combination of strong demand from China and other Asian markets, and tight international supply due to adverse weather conditions in many parts of the world. “These higher prices have more than offset the negative effects of an appreciating Kiwi dollar against the US dollar.”
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Fonterra hikes milk payout by 60c
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