New Zealand dairy cooperative Fonterra today (28 April) announced an upward revision in its forecast payout to its farmer shareholders for the 2008/9 season.
The company raised its forecast by ten cents to NZ$5.20 (US$2.90) per kilogramme of milk solids.
The $5.20 per kgMS forecast comprises a milk price of NZ$4.75 per kgMS, up 10 cents, and an unchanged value return forecast of 45 cents per kgMS.
Fonterra Chairman, Henry van der Heyden, said the move reflected the board’s desire to do what it could to assist farmer-shareholders during a very difficult year of sharply lower commodity prices.
“Although international dairy markets remain uncertain and volatile, some encouraging signs of more stability have been emerging in recent months. Powder prices on our global dairy trade platform have increased and our global sales team has made good progress in selling product at these improved prices. As a result, we now have the cautious optimism necessary to signal a modest but welcome increase in payout,” van der Heyden commented.
However, he added that the company needed to “tread a fine line” between maximizing its payout to farmers and strengthening the cooperative’s balance sheet.