Dairy Farmers Expecting Higher Advance

4 October 2004

Dairy Farmers Expecting Higher Advance

Dairy farmers are hoping Fonterra Co-operative Group will increase the current season’s forecast final payout and raise its advance payout this week, says Kevin Wooding, Chairman of Dairy Farmers of New Zealand (DFNZ).

"By increasing the forecast payout, Fonterra has the opportunity to raise this season’s advance payment rate, which will help shareholders through a difficult season," Mr Wooding said.

Fonterra’s annual meeting on October 7 is expected to include mention of the co-operative's advance payment rates and the 2004/05 season forecast. The current forecast of $3.85 kg/ms was set in June

The advance payment rate refers to the amount dairy farmers are paid through the season for their milk, before the final payout is confirmed. The rate is set as a proportion of the full year forecast.

"Commodity prices continue to move positively with many at an all time high. With the exception of unfavourable exchange rate movements, there is no reason why farmers shouldn't see rising milk returns in the forthcoming season.

“Increasing the advance rate would provide a much needed confidence boost to dairy farmers who are down on production, with some struggling to pay their bills.

“Climatic conditions such as flooding in the Bay of Plenty and the Lower North Island and a difficult season in general have been a strain on many dairy farmers, so an increased advance rate would help ease this.

"Last season Fonterra succeeded in lifting payout from the forecast $3.80 at the season's start to the end result of $4.25, which was a good effort that I hope to see again this year," Mr Wooding said.

Dairy Farmers of New Zealand is an industry group of Federated Farmers of New Zealand (Inc)

ENDS

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