Scoop has an Ethical Paywall
Work smarter with a Pro licence Learn More

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

 

Westland ups its payout prediction

Westland ups its payout prediction for the coming season

New Zealand’s second biggest dairy co-operative Westland Milk Products has today released a budget for the 2016-17 dairy season of $4.55 - $4.95 per kilo of milk solids (kgMS).

Payout for the current season will be in the range of $3.80 - $3.90 per kgMS.

Westland will also start its payout advance payments for the 2016/17 season at $3.80 per kgMS, payable 20 September 2016.

Chairman Matt O’Regan says, “This will provide much needed cash as early in the season as possible. Advance rates are budgeted to be phased down then stepped up, an approach similar to previous seasons.”

O’Regan says the 2016/17 forecast while predicted to end with a better result than the 2015/16 season, still leaves farmers with cash flows well below their cost of production. The Board and management will be looking for every opportunity to get as much cash to farmers as possible.

Chief Executive Rod Quin says the key influencers on payout are international market prices, foreign exchange rates, the contribution of Westland’s value-add strategy, milk flows and expenses.

“The contribution to payout of our strategic move into value-add products – infant nutrition, EasiYo, retail butter and UHT milk and cream – is worth noting,” Quin says. “Collectively, their value over and above the earnings we can expect from skim milk powder is budgeted at 48c per kgMS.”

Quin says while Westland’s pay out prediction is more optimistic than the current season, the market still faces a number of challenges.

Advertisement - scroll to continue reading

Are you getting our free newsletter?

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.

“Prices remain under pressure as European and US dairy stock piles are now a feature of the market. Early contracts in our sales book are in line with budgeted prices, but market volatility with price movements, both up and down that can be sudden, make forecasting difficult.

“Based on what we see in the market today, with a forward view of global stock levels, customer demand and milk flows, we anticipate some minor increases for whole milk powder. However, we do expect pressure on skim milk and butter prices.”

ENDS

© Scoop Media

Advertisement - scroll to continue reading
 
 
 
Business Headlines | Sci-Tech Headlines

 
GenPro: General Practices Begin Issuing Clause 14 Notices

GenPro has been copied into a rising number of Clause 14 notices issued since the NZNO lodged its Primary Practice Pay Equity Claim against General Practice employers in December 2023.More

SPADA: Screen Industry Unites For Streaming Platform Regulation & Intellectual Property Protections

In an unprecedented international collaboration, representatives of screen producing organisations from around the world have released a joint statement.More

 
 
 
 
 
 
 
 
 
 
 
 

Join Our Free Newsletter

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.