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Wednesday, 12 November 2014 11:18

Payout is priority

Written by 
Theo Spierings addresses the AGM. Theo Spierings addresses the AGM.

FONTERRA IS assuring farmers that the milk payout will remain its main priority.


Speaking at the co-op's annual meeting in Palmerston North this morning, Fonterra chairman John Wilson said the co-op is always striving to improve total payout to farmers.


"Our payout strategy will never change," he says.


Wilson acknowledged that on-farm cash flow is tight given the sharp drop in payout compared to last year.

 

Fonterra is forecasting $5.30/kgMS this season. Last season farmers received $8.50/kgMS - comprising a milk price of $8.40 and 10/share dividend.


Wilson says tight cash flow will force farmers to reduce feed and supplements in summer; more cows are also expected to be culled.


This will impact milk production for this season and next season. Fonterra's milk supply this season is up 3% compared to last season.

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