Cashflow boost for Fonterra farmers

Fonterra farmers have received a cashflow boost with confirmation of a further 10c per share payment of the co-operative’s 2015-16 40c forecast dividend.

The co-operative had already brought forward an earlier dividend payment during the last financial year.

Its intention was always to declare a further dividend in August, subject to financial performance supporting the forecast earnings per share range of 45c to 55c, chairman John Wilson said in a statement.

While early signs of the expected recovery in dairy prices were being seen, conditions on-farm were challenging.

The relative strength of Fonterra’s balance sheet enabled the co-operative to support farmers during a time when there was "great pressure" on them.

The payment would be made next month.

There was no change to its forecast earnings range or its forecast total dividend of 40c per share in the 2016 financial year.

The end of season farmgate milk price and total payout would be confirmed as part of Fonterra’s  annual results announcement on September 22.

Fonterra Shareholders’ Fund unit holders would receive a distribution payment of 10c per unit, he said.

Meanwhile, Fonterra’s latest Global Dairy Update shows China’s dairy imports lifted 26% for the year to June, with fluid and fresh dairy up 69% and infant formula up 42%, while European milk production growth was at its lowest level since early 2015.

Global dairy exports remained strong, excluding the United States where increased domestic demand and less competitive export prices continued.

Total New Zealand dairy exports in June increased 33% compared  with the same month last year, while exports for the 12 months to June were up 7% compared  with the previous year.

BNZ’s latest Rural Wrap showed dairy export values sank a further 8% in the year to June 2016, adding to the 21% decline in the year before that.

Annual dairy exports were nearly $5 billion lower than two years ago, reflecting the major slump in international prices.

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