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Dairy Farmers' Margins Increasingly Squeezed

23 July 2003
PR142/2003
Dairy Farmers' Margins Increasingly Squeezed

Fonterra's final payout of $3.63 per kilogram milk solids is an unsatisfactory level of income for dairy farmers, says Dairy Farmers of New Zealand Chairman Kevin Wooding.

"However Fonterra's net surplus of $284 million for 2002/3 is pleasing given the impacts of a rising exchange rate and lower commodity prices internationally, said Mr Wooding.

"Fonterra must be commended for improvements in their cost structures and for not trying to improve the result by weakening the balance sheet.

"But rest assured farmers will be pouring over the balance sheet in the next few weeks looking for opportunities for Fonterra to improve their spending in the corporate area.

"This result highlights the reality that farmers are facing a cost squeeze in the current world environment exacerbated by Government policy.

"The challenge ahead for dairy farmers is to remain competitive in a highly subsidised international market place as our natural advantages are eroded by excessive compliance costs."

ENDS

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