NEW ZEALAND: Fonterra cuts payout forecast
By Katy Askew | 13 March 2012
Dairy giant Fonterra has cut its forecast payout to farmers, blaming the strength of the New Zealand dollar, higher production levels and declining commodity prices.
Fonterra yesterday (12 March) lowered its planned payout for the 2011/12 season by 15 cents to NZ$6.75-6.85. The dairy co-operative said it expects to pay a milk price of NZ$6.35 a kilogram of milk solids and a 40-50 cent a share distributable profit to its farmer-shareholders.
Fonterra chairman Sir Henry van der Heyden said the lower forecast reflected declining commodity prices. Prices had dropped in five out of the last six of Fonterra's online Global Dairy Trade (GDT) auctions. Overall, the GDT-Trade Weighted Index has dipped 5.7% since mid-December.
Van der Heyden also said the board was concerned about the strength of the New Zealand dollar and uncertainties in international markets.
These factors, coupled with higher levels of global milk production, prompted Fonterra's board to lower its forecast.
Chief executive Theo Spierings said dairy commodity prices were likely to remain under pressure for the next six months. He added Fonterra expects stronger global production continuing throughout this year.
"International milk powder demand, however, currently appears robust which should help offset the impact of the stronger milk supply growth," Spierings said.
Sectors: Commodities & ingredients, Dairy, Multichannel
Companies: Fonterra
View next/previous articles
13 Mar 2012 -
Currently reading -
NEW ZEALAND: Fonterra cuts payout forecast
13 Mar 2012 -
Related research
Fonterra Co-operative Group in Ingredients (World)
Fonterra Co-operative Group is one the world’s largest dairy companies. It produces both ingredients (speciality and bulk) and consumer goods for a global market. The majority of its milk supply comes from its co-operative of farms in New Zealand. Ho...
Dairy in Chile industry profile provides top-line qualitative and quantitative summary information including: market share, market size (value and volume 2006-10, and forecast to 2015). The profile also contains descriptions of the leading players in...
Yoghurt in New Zealand is mature and consists of a wide range of products. Innovative products including characteristics such as reduced fat, no added sugar and added probiotic cultures are increasingly popular due to the continued trend towards heal...
Related articles
NZ: Fonterra cuts 2012/13 profit forecast
Dairy giant Fonterra has lowered its forecast for annual earnings in its next financial year, blaming currency fluctuations and "difficult" trading conditions in Australia and New Zealand.
There are currently no comments on this article
Be the first to comment on this article