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Wednesday, 19 November 2014 08:37

Milk payout under pressure

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Milk payout under pressure

MILK PAYOUT to Fonterra suppliers is under more pressure after this morning's Global Dairy Trade auction results.

The latest GDT auction result saw the average price index down 3.1% compared to the last auction.

Fonterra's board meets early next month to review the $5.30/kgMS milk payout; a further cut is now almost certain.

In a worrying sign for Fonterra farmers, the price of whole milk powder- the flagship product- was down 5.1% over the previous auction. Skim milk powder price was also down a whopping 5.7%.

Fonterra's current forecast price consists of a $5.30/kgMS milk price and a dividend range of 25 to 35c. For a fully shared up farmer, this translates into a payout of $5.55 to $5.65 for the season. Last season Fonterra paid a record $8.40/kgMS milk price and a dividend of 10c/share.

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