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Tatua delivers a stunner

Media Release

30 September 2013

Tatua delivers a stunner

Despite the high kiwi dollar, the Waikato based dairy cooperative, Tatua, has delivered an excellent result for its shareholding farmers with a cash payout after retentions of $7.40 per kilogram of milk solids (kg/MS).  

“Tatua has always been a high performer and this is more than impressive. It is stunning,” says David Fish, a Federated Farmers member and Tatua shareholder.

“An after retention payout of $7.40 kg/MS leaves every other dairy processor trailing in our wake.  Fonterra, after all, announced last week a combined milk and dividend payout of $6.16 kg/MS.

“When we use the word retention, Tatua is retaining $1.17 kg/MS to grow the cooperative as a business.  This means the amount available for payout to Tatua shareholders was a mighty $8.57 kg/MS.

“Part of Tatua’s current success is less focus on milk powder and a greater focus on specialised food ingredients.  If there are dark clouds, it is possibly the stubbornly high Kiwi dollar and the high current value of milkpowder.

“That the coop has turned in such stellar results is full marks to our management and board’s hedging arrangements and business strategy.

“While the value-add focus of Tatua is totally correct and this season verifies it, we may see less impressive results for the season we are currently in.  Recently milk powder has surged in price but in the long run, Tatua’s value-add strategy will deliver shareholders more consistent results.

“As shareholders we also know the DIRA clock is ticking. 

“Within the next two seasons, Tatua will need to ensure it has sufficient milk supply and that would seemingly give us several options.  We could widen the shareholding or we will need to sign commercial agreements for extra raw milk. 

“I guess we could do both because Tatua’s balance sheet is incredibly healthy and the coop is performing extremely well,” Mr Fish concluded.


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