New Zealand dairy giant Fonterra has announced a further 15% cut in the milk payout to its farmer owners.
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It is the third time Fonterra has cut the price it pays for milk in the last six months.
Farmers will now get NZ$5.10 (US$4.06) per kilogram of milk solids.
Fonterra said it anticipates that the dairy industry is in for a difficult 18 months, but chairman Henry van der Heyden said the co-operative is well placed to handle any challenges.
“We’ve got the funding lines in place, we’ve got the stand-by facilities in place and we are comfortable where we are today,” he said as he announced the price cut.
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By GlobalDataVan der Heyden attributed the fall in milk prices to a decline in commodity prices and the global financial crisis.
However, Fonterra’s shareholder council has said it is “disappointed” by the magnitude of the cuts.
Commenting on the news, shareholders’ council chairman Blue Read said: ““After a record payout last year… we are now confronted by a reduction of more than 25% in our farm revenues for the season.
“These are challenging times and like many New Zealanders, Fonterra farmers are feeling the pinch.”
