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


Fonterra lifts forecast milk pay-out by 30 cents

Fonterra lifts forecast milk pay-out by 30 cents

by Paul McBeth

Dec. 10 (BusinessDesk) – Fonterra Cooperative Group, the world’s biggest dairy exporter, has lifted its forecast pay-out to farmers by 30 cents per kilogram of milk solids (kgMS) as international prices stay buoyant.

However, it remains concerned about the strength of the New Zealand dollar.

The 2011 payment is expected to be $6.90 per kgMS, up from an earlier estimate of $6.60, and distributable profit will probably be in a range of between 40 cents and 50 cents a share.

The exporter held its forecast distributable profit range at between $550 million and $690 million in the year ended July 31.

“International dairy market prices have generally held up better than initially expected when we made the opening forecast back in late May,” Ferrier said in a statement.

“Offsetting this good news has been a stronger New Zealand dollar which is eroding the value of dairy export returns for our farmers.”

Milk powder prices rose 1.6% in Fonterra’s latest online dairy auction, and ongoing global demand for dairy products has helped underpin New Zealand’s slowly emerging economic recovery as farmers are able to repay debt on the back of their bigger receipts.

Fonterra is monitoring the current drought conditions, and will update the board on expected production levels. Chairman Henry van der Heyden said the dry weather could add to production costs if it persists.

“It’s still early in the season, and some good falls of rain could help a lot, but milk production in the North Island is declining and we know farmers in some regions are struggling,” van der Heyden said.

Independent valuer Grant Samuel estimated a restricted market value range for Fonterra shares at between $4.11 and $4.78.

The mid-point is $4.45 a share. The exporter’s board estimates fair value to be $4.52 a share.

Fonterra will allow share trading between farmers after they voted in favour of capital structure changes to inject cash into the cooperative.

Almost three-quarters of shareholders bought an extra 13.5 million tradable shares worth $61 million when the offer closed at the end of September.

(BusinessDesk) 10:05:39

© Scoop Media

Business Headlines | Sci-Tech Headlines


Stats NZ: Consents For New Homes At All-Time High

A record 41,028 new homes have been consented in the year ended March 2021, Stats NZ said today. The previous record for the annual number of new homes consented was 40,025 in the year ended February 1974. “Within 10 years the number of new homes ... More>>

Stats NZ: Unemployment Declines As Underutilisation Rises

The seasonally adjusted unemployment rate decreased to 4.7 percent in the March 2021 quarter, continuing to fall from its recent peak of 5.2 percent in the September 2020 quarter but remaining high compared with recent years, Stats NZ said today. ... More>>


Digitl: The Story Behind Vodafone’s FibreX Court Ruling

Vodafone’s FibreX service was in the news this week. What is the story behind the Fair Trading Act court case? More>>

Reserve Bank: Concerned About New Zealand's Rising House Prices

New Zealand house prices have risen significantly in the past 12 months. This has raised concerns at the Reserve Bank of New Zealand – Te Putea Matua about the risk this poses to financial stability. Central banks responded swiftly to the global ... More>>

Westpac: Announces Strong Financial Result

Westpac New Zealand (Westpac NZ) [i] says a strong half-year financial result has been driven by better than expected economic conditions. Chief Executive David McLean said while the global COVID-19 pandemic was far from over, the financial effect on ... More>>

MYOB: SME Confidence In Economic Performance Still Cautious

New insights from the annual MYOB Business Monitor have shown the SME sector is still cautious about the potential for further economic recovery, with two-in-five (41%) expecting the New Zealand economy to decline this year. The latest research ... More>>