Federated Farmers Otago dairy chairman Stephen Crawford says
Fonterra's record forecast farmgate milk price is ''very good
news'' but cautions it is ''not in the bank yet''.
On Tuesday, the dairy giant lifted its forecast by a further
50c to $8.30kg ms. That increase, along with an estimated
dividend of 32c a share, amounted to a forecast cash payout
Mr Crawford described it as a very solid forecast, which
equated to about 71c per litre of milk, but pointed out there
was still 10 months of the production season ahead.
While not trying to put a dampener on it, it was still a
forecast and there were ''any number of things that could
derail it'', he said.
The main priority for Fonterra suppliers should be reducing
debt, doing environmental work and working on security of
on-farm resilience, he said.
Yesterday, Fonterra confirmed a $6.16 payout for the 2013
year. Overall, that was a good result, although for a lot of
farmers ''there's not that much in it for them'', Mr Crawford
Fonterra Shareholders' Council chairman Ian Brown said the
2013 payout was an ''accurate reflection of the season''.
Given the pressure placed on Fonterra by drought and the
unpredictability experienced in international markets, the
co-operative had delivered a satisfactory return for farmers,
Mr Brown said.
The success of the integrated Australia-New Zealand business,
which had encountered tough market conditions of late, was
vital for Fonterra. It had been working hard to adapt to the
changing Australian business environment. Changes had been
made to that business, but there was a cost associated with
those changes and the council would continue to monitor the
situation, he said.
He was satisfied with the final dividend of 32c and said the
co-operative had displayed a ''welcome degree of pragmatism''
in its decision on retentions, given the cash flow issues
being faced by some farmers.
Farmers would be happy to put the climatic challenges of last
season behind them and were ''buoyed'' by the forecast payout
for next season, he said.
Federated Farmers national dairy vice-chairman Andrew Hoggard
said for many farmers, the 2012-13 payout would mean they
would be able to make a small financial surplus, as both the
milk price and the dividend were close to farm operating