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Westland Milk Products has trumped Fonterra by announcing a final payout of $6.34kg/ms before retentions for a ''tough'' 2012-13 season.
The payout, with a retention of 30c, was a 7% increase on the initial season opening budget by New Zealand's second-largest dairy co-operative. Fonterra has confirmed a $6.30 payout before retentions of 14c.
Westland chief executive Rod Quin described it as a satisfying result given the tough farming and trading conditions, which included a major flood in South Westland followed by one of the worst droughts in living memory for most on the Coast.
Milk volumes from shareholders were up 5.7% at 621 million litres and milk purchased from other dairy processors contributed a further 68 million litres.
Turnover remained steady at $535 million, up from $534 million last year, with a high New Zealand dollar dampening the high market prices in the second half of the season.
The results were a testament to the resilience and resourcefulness of the co-operative's shareholders and staff, Mr Quin said.
Westland ended the financial year with a slightly lower equity to assets ratio than last year at 49%, down from 51%.
That reflected the co-operative's recent investments, particularly in the development of new plant for the manufacture of specialist nutritional products such as baby formula.
The results confirmed Westland's strategic decision to move from being a manufacturer of ingredients, to being a supplier of added-value nutritional products which returned higher prices for the company and better results for shareholders, Mr Quin said.
The co-operative's financial position meant it was well placed to continue that strategy.
The new nutritionals plant would be operating to full capacity in the 2013-14 season and options for further development were being investigated.
While early in the season, milk volumes were 10% above budget and payout predictions were at a near record high.
The most recent 2013-14 season forecast was $7.60-$8kg/ms.
Federated Farmers West Coast dairy chairman Richard Reynolds said Westland deserved credit for making a $6.34 surplus, as the season ''must rank as one of the weirdest we've had here on the Coast''.
The difference in the final payout between Westland and Fonterra was due to Fonterra retaining 14c kg/ms, while Westland retained 30c kg/ms.
''We are comfortable with what Westland is retaining despite it leaving us with slightly less cash in the hand at $6.04kg/ms.
''Retentions are vital to grow our co-operative and while we may benchmark ourselves to Fonterra, we must not fall into the trap of trying to go toe-to-toe with them,'' Mr Reynolds said.
After the deregulation of the New Zealand dairy industry in 2001, nearly all of the dairy co-operatives amalgamated to create Fonterra, while Westland Milk Products shareholders voted to remain an independent co-operative.