Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Fonterra hikes forecast pay-out to farmers further

Fonterra hikes forecast pay-out to farmers on firm global demand

By Paul McBeth

Feb. 27 (BusinessDesk) - Fonterra Cooperative Group, the world’s biggest dairy exporter, has raised its forecast pay-out to farmers as global demand for milk powders remains strong, while holding its expectations for a reduced dividend.

The Auckland-based company expects to pay $8.65 per kilogram of milk solids to farmers in the 2013/14 season, up from a previous forecast of $8.30 per kgMS, it said in a statement. The dairy company held its forecast dividend of 10 cents per share.

The increase is 70 cents lower than what it would be using calculations from regulated milk price manual, carrying on Fonterra’s decision to pay a lower price due to the production mismatch when prices for its whole and skim milk powder surged ahead of its higher margin products such as cheese and butter.

“The increase reflects continuing strong demand for milk powders globally,” chairman John Wilson said. “The board has the discretion to pay a lower Farmgate Milk Price than that specified in the manual, if it is in the best interests of the cooperative.”

The New Zealand dollar rose to 83.11 US cents at 8.45am in Wellington from 82.85 cents immediately before the announcement.

In December Fonterra slashed its forecast dividend to 10 cents from 32 cents, while keeping the forecast farmgate pay-out unchanged as surging prices for whole and skim milk powder weren’t matched by higher-value products such as casein and cheese.

At the time, Fonterra said it was limited by its plant configuration on how much milk powder it can produce, with about 70 percent of production capacity for milk powder and the remainder making cheese and casein.

Fonterra’s Wilson said the company will provide an update on the business performance when it announces its first-half result on March 26.

The company’s board also approved an increase of 25 cents per kgMS in the advance rate schedule of monthly payments from March through to June.

Units in the Fonterra Shareholders’ Fund, which provides investors exposure to the company’s dividend stream, rose 1.1 percent to $6.22 yesterday, and have gained 7.2 percent this year.

(BusinessDesk)


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Media: Julian Wilcox Leaves Māori TV

Māori Television has confirmed the resignation of Head of News and Production Julian Wilcox. Mr Maxwell acknowledged Mr Wilcox’s significant contribution to Māori Television since joining the organisation in 2004. More>>

ALSO:

Genetics: New Heat Tolerant Cow Developed

Hamilton, New Zealand-based Dairy Solutionz Ltd has led an expert genetics team to develop a new dairy cow breed conditioned to thrive in lower elevation tropical climates and achieve high milk production under heat stress. More>>

Fractals: Thousands More Business Cards Needed To Build Giant Sponge

New Zealand is taking part in a global event this weekend to build a Menger Sponge using 15 million business cards but local organisers say they are thousands of business cards short. More>>

Scoop Business: NZ Net Migration Rises To Annual Record In September

New Zealand’s annual net migration rose to a record in September, beating government forecasts, as the inflow was spurred by student arrivals from India and Kiwis returning home from Australia. More>>

ALSO:

Scoop Business: Fletcher To Close Its Christchurch Insulation Plant, Cut 29 Jobs

Fletcher Building, New Zealand’s largest listed company, will close its Christchurch insulation factory, as it consolidates its Tasman Insulations operations in a “highly competitive market”. More>>

ALSO:

Scoop Business: Novartis Adds Nine New Treatments Under Pharmac Deal

Novartis New Zealand, the local unit of the global pharmaceuticals firm, has added nine new treatments in a far-ranging agreement with government drug buying agency, Pharmac. More>>

ALSO:

Crown Accounts: English Wary On Tax Take, Could Threaten Surplus

Finance Minister Bill English is warning the tax take may come in below forecast in the current financial year, as figures released today confirm it was short by nearly $1 billion in the year to June 30 and English warned of the potential impact of slumping receipts from agricultural exports. More>>

ALSO:

Auckland Outage: Power Mostly Restored Overnight

Vector wishes to advise that all but 324 customers have been restored overnight. These customers are spread throughout the network in small pockets. The main St Johns feeder was restored around midnight allowing most of the customers in all affected areas to have power this morning. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand

Mosh Social Media
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news