Fonterra is sticking to its forecast payout range for the 2010/11 season of between $6.90 and $7.10 a kilogram of milksolids.This represents a gross income of about $700,000 for the average supplier, and based on average on-farm costs compiled by the Mini
Fonterra is sticking to its forecast payout range for the 2010/11 season of between $6.90 and $7.10 a kilogram of milksolids.
This represents a gross income of about $700,000 for the average supplier, and based on average on-farm costs compiled by the Ministery of Agriculture and Forestry, a profit approaching $150,000.
The milk price forecast was held at $6.60/kgMS which would be coupled with a profit after tax of 30-50c per share.
Fonterra chairman Sir Henry van der Heyden said although international prices had declined in recent months, a number of factors signalled potential improvement in prices later in the year.
“While there is still some uncertainty in global markets, if current commodity pricing and foreign exchange rates were at current levels for the rest of the season, then we estimate the 2010/11 payout would be marginally lower than our current forecast,” he said.
Chief executive Andrew Ferrier was at an early stage and the outlook finely balanced.
“On the one hand, the New Zealand dollar remained relatively strong, prices for dairy ingredients had fallen from their April peak and there is some evidence global economic growth is slowing,” he said.
However, he said weather in Europe, Russia, Pakistan and parts of China has affected agricultural production, although the extent of the impact on dairy was unknown.
“The Russian wheat export ban has continued to a lift in prices for grain feed, which could lend support to dairy prices.”
