Fonterra has said that it will be reviewing its current 2010/11 payout forecast for milk due to a further drop in international dairy prices and a strong New Zealand dollar.
The firm said today (4 August) that following its latest global dairy auction, the gDT-TWI index was down 8.3%. This followed a 13.7% decline at the July event.
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“Encouragingly, whole milk powder had strengthened slightly for the February to April period,” said CEO Andrew Ferrier. “But the New Zealand dollar was at very high levels.”
Ferrier said that as part of its normal planning process Fonterra is reviewing the current forecast in light of these developments.
“We always said there would be a lot of volatility in the market and we are seeing it. It’s important in this environment to let our farmer-shareholders know as soon as possible if we think there could be any impact on payout,” he said.
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