Fonterra Payout to Dairy Farmers at $6.90

NEW ZEALAND - Fonterra today pumped up to another $180 million into the Waikato economy with a revised milk payout forecast of $6.90/kg milksolids, but industry experts say the final figure is likely to go higher yet.

13 December 2007

1 minute read

Oceania

The average Waikato farmer produces 100,000kg/milksolids a year, meaning the 50c increase from the previous record payout of $6.40/kg milksolids will add another $50,000 to the income of the region's 3600 farm owners and sharemilkers.

Fonterra chairman, Henry van der Heyden said this morning: "The higher milk price is due to an increase in milk supply which has flowed through to higher sales volumes at higher prices, but the gains have been somewhat offset by the higher New Zealand dollar."

Fonterra has also set the interim Fair Value Share price for the 2008/09 season at $7.01, an increase of 22 cents on the current Fair Value Share price of $6.79.

Speaking before today's announcement, DairyNZ senior scientist Dr John Roche said a $7 payout was not a certainty but was "highly likely" before the dairy season ended in June 2008.

"We are looking at an artificially high commodity market at the moment. We have very low stores of food in the world and very high demand."

Morrinsville farmer and former Federated Farmers president Lloyd Downing said yesterday farmers were not betting on dairying's good fortune to continue beyond next year. "The prices are starting to head down."

Source: Waikato Times