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

 


Westland cuts forecast payout on falling global dairy prices

Westland cuts forecast payout on falling global dairy prices, strong kiwi

By Paul McBeth

Aug. 28 (BusinessDesk) - Westland Milk Products, the Hokitika-based dairy cooperative, has overtaken rival Fonterra Cooperative Group in cutting its forecast payout to farmers, citing falling global dairy prices and the persistent strength in the kiwi dollar.

The cooperative revised its payout forecast to between $5.40 and $5.80 per kilogram of milk solids before retentions in the 2014/15 season, down from between the $6 and $6.40/kgMS forecast in July. Chief executive Rod Quin pointed to the 12 percent drop in skim milk powder prices at the last GlobalDairyTrade auction, which makes up a substantial proportion of Westland's production as weighing on the new forecast.

"The reduction is driven by falls in prices across the global and the continued high value of the New Zealand dollar," Quin said in a statement. "Our traditional reliance bulk dairy commodities such as skim milk makes us more vulnerable to the cyclical swings of the international dairy market."

Fonterra yesterday affirmed its forecast payout at $6/kgMS, saying it expects commodity prices to improve later this year or early in 2015, with global dairy demand continuing to grow.

The GDT price index slipped 0.6 percent to a two-year low of US$3,000 in the GlobalDairyTrade auction on Aug. 20, as a percent slump in skim milk powder was partly offset by a 3.4 percent gain for whole milk powder.

Westland's Quin said the company is continuing with its strategy to grow production of higher value nutritional products such as infant formula, including its recent $102 million investment in a drier at Hokitka to shift more production to those products.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: RBNZ Starts Talks On Tougher Rules For Property Speculators

The Reserve Bank of New Zealand is stepping up preparations to restrict lending to residential property investors as it watches house prices, particularly in Auckland, continue to rise strongly. More>>

ALSO:

Research: ‘Ageing Well’ Science Challenge Launched

Science and Innovation Minister Steven Joyce today launched the Ageing Well National Science Challenge, confirming initial funding of $14.6 million. More>>

ALSO:

Scoop Business: Govt Resisting Pressure To Pump More Cash Into Solid Energy

Prime Minister John Key says it is “not the government’s preferred option” to make a fresh capital injection into the troubled state-owned coal miner, Solid Energy, but dodged journalists’ questions at his weekly press conference on whether that might prove necessary... More>>

ALSO:

Lagest Ever Privacy Breach Award: NZCU Baywide Accepts “Severe” Censure In Cake Case

NZCU Baywide says that once it was found to have committed a breach of a former staff member’s privacy, it had attempted to resolve the matter... the censure and remedies for its actions taken almost three years ago are “severe” but accepted, and will hopefully draw a line under the matter. More>>

ALSO:

Scoop Business: PayPal Stops Processing Mega Payments; NZX Listing Still On

PayPal has ceased processing payments for Mega, the file storage and encryption firm looking to join the New Zealand stock market via a reverse listing of TRS Investments, amid claims it is not a legitimate cloud storage service. More>>

ALSO:

Housing Policy: Auckland Densification As Popular As Ebola, English Says

Finance Minister Bill English said calls by the Reserve Bank Governor for more densification in Auckland’s housing were “about as popular in parts of Auckland as Ebola” would be. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news