Friday, 18 August 2023 09:05

LIC forecast earnings takes a hit

Written by  Sudesh Kissun
LIC board chair Murray King LIC board chair Murray King

Herd Improvement company LIC’s earning guidance has taken a hit as this season’s forecast milk price for farmers continues to plummet.

LIC says its underlying earnings for 2023-24 financial year will be in the range of $17-$22 million. In July, the co-operative expected underlying earnings to be in the range of $22-28.

LIC is also leaving open the possibility of another revision if milk prices continue to fall.

It says the revised guidance assumes “no further milk price changes or significant climate events take place”.

In the past two weeks, Fonterra has slashed $1.25 from its forecast farmgate milk price range mid-point.

Farmers now expect to be paid $6.75/kgMS for milk this season.

LIC board chair Murray King says earnings were anticipated to be lower than initially forecasted, however the co-op remains committed to ensuring farmers can continue their investment to breeding the most efficient cows for their herd.

“Although it is early into the season, the lower forecast milk payout has created a challenging economic landscape for many dairy farmers across New Zealand.

“Our farmers will be reviewing their cost structures and as their co-operative we are doing the same.

“The board is committed to protecting the long-term sustainability of the co-op and the efficiency of our farmers’ herds, while ensuring that we continue to deliver exceptional value on farm.”

LIC says it will continue to update the market in line with its continuous disclosure obligations.

More like this

Featured

Big return on a small investment

Managing director of Woolover Ltd, David Brown, has put a lot of effort into verifying what seems intuitive, that keeping newborn stock's core temperature stable pays dividends by helping them realise their full genetic potential.

Editorial: Sensible move

OPINION: The Government's decision to rule out changes to Fringe Benefit Tax (FBT) that would cost every farmer thousands of dollars annually, is sensible.

National

Machinery & Products

» Latest Print Issues Online

Milking It

Cuddling cows

OPINION: Years of floods and low food prices have driven a dairy farm in England's northeast to stop milking its…

Bikinis in cowshed

OPINION: An animal activist organisation is calling for an investigation into the use of dairy cows in sexuallly explicit content…

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter