Fonterra shaves 50c off forecast milk price
Fonterra has dropped its forecast milk price mid-point by 50c as a surge in global milk production is putting downward pressure on commodity prices.
The organisation represents NZ's agricultural contractors and its concerns come in the wake of reports that Fonterra has extended by two months the time it takes to pay suppliers; while also asking them to cut their charges.
The dairy co-op has defended the move as about boosting efficiency.
RCNZ president Steve Levet says this is not the type of action an industry-leader like Fonterra should be undertaking.
"It sends a terrible message to farmers. That it is ok to delay paying suppliers and that is not on," Levet says.
"We all understand the dairy sector is undergoing a very, tough period. But this should not be used as an excuse to not pay contractors in a fair and timely manner."
Levet believes dairy farmers – many who will be making a loss this year – would not approve of such action and he does not want to see them to take a similar stance with their own suppliers.
"Dairy farmers – on the whole – are good and fair people, but when Fonterra takes a stance like this – they make think it is ok for them to do the same.
"I can tell you rural contractors are hurting just as much as dairy farmers. The last thing we need is for people to delaying paying us or trying to dictate pricing. We all have to live."
Levet calls on dairy farmers to pressure Fonterra to ensure it treat its contractors fairly.
