That Christmas jingling could come from dairy farmers' pockets

Christmas could come early for Fonterra farmer shareholders with predictions that the forecast payout could even top a record $9.

Economists have been predicting the dairy giant will this week lift its milk price by 20c-40c, from $8.30/kg ms to $8.50-$8.70.

With a estimated 32c-per-share dividend on top of that, it would give a forecast cash payout of $8.82-$9.02.

An announcement on the latest forecast was likely to be made today. Speaking at the co-operative's annual meeting in Edendale late last month, Fonterra chairman John Wilson said the 2014 season seemed likely to deliver a record high payout.

Yesterday, Craigs Investment Partners broker Peter McIntyre said the expectation was that the forecast would go very close to $9.

With a 30c lift from the current forecast milk price meaning an extra $497.3 million for the country's economy, that was ''really positive'' and ''massive'' for Otago and Southland, with their strong dairying profile.

Such an increase would be welcomed by farmers trying to get their debt profile down. It would also put further pressure on land prices, he said.

Forsyth Barr broker Andrew Rooney said global dairy demand looked ''hard to derail'' and might in fact be understated.

Dairy had a direct contribution to the New Zealand economy but the flow-on effects were significantly larger.

Demand for proteins continued to be very strong from China while the proposed changes in the one-child policy provided an additional positive, he said.

American company Land O' Lakes will join the GlobalDairyTrade platform in March, bringing the number of sellers to seven.

The company, which had annual sales of more than $14 billion in 2012 and customers in more than 60 countries, will initially offer skim milk powder. Butter will be offered later in the year.

GlobalDairyTrade director Paul Grave said the company was ''honoured'' a company with Land O'Lakes' stature was participating in GDT.

It demonstrated GDT's expanding role as a key platform for international trade in a broad range of dairy commodities, he said.

 

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