Saturday, 28 May 2016 12:23

Westland ups its payout forecast

Written by 
Westland chairman Matt O'Regan. Westland chairman Matt O'Regan.

New Zealand's second biggest dairy cooperative Westland Milk Products has released a budget for the 2016-17 dairy season of $4.55 - $4.95/kgMS.

Payout for the current season will be in the range of $3.80 - $3.90/kgMS.

Westland will also start its payout advance payments for the 2016/17 season at $3.80/kgMS payable September 20, 2016.

Chairman Matt O'Regan says, "This will provide much needed cash as early in the season as possible. Advance rates are budgeted to be phased down then stepped up, an approach similar to previous seasons."

O'Regan says the 2016/17 forecast while predicted to end with a better result than the 2015/16 season, still leaves farmers with cash flows well below their cost of production. The board and management will be looking for every opportunity to get as much cash to farmers as possible.

Chief Executive Rod Quin says the key influencers on payout are international market prices, foreign exchange rates, the contribution of Westland's value-add strategy, milk flows and expenses.

"The contribution to payout of our strategic move into value-add products – infant nutrition, EasiYo, retail butter and UHT milk and cream – is worth noting," Quin says. "Collectively, their value over and above the earnings we can expect from skim milk powder is budgeted at 48c per kgMS."

Quin says while Westland's pay out prediction is more optimistic than the current season, the market still faces a number of challenges.

"Prices remain under pressure as European and US dairy stock piles are now a feature of the market. Early contracts in our sales book are in line with budgeted prices, but market volatility with price movements, both up and down that can be sudden, make forecasting difficult.

"Based on what we see in the market today, with a forward view of global stock levels, customer demand and milk flows, we anticipate some minor increases for whole milk powder. However, we do expect pressure on skim milk and butter prices."

More like this

Top dairy CEO quits

Arguably one of the country's top dairy company's chief executives, Richard Wyeth has abruptly quit Chinese owned Westland Milk Products (WMP)

$10 milk price still on

Whole milk powder prices on Global Dairy Trade (GDT) remains above long run averages and a $10/kgMS milk price for the season remains on the card, says ASB senior economist Chris Tennent-Brown.

Featured

Fencing excellence celebrated

The Fencing Contractors Association of New Zealand (FCANZ) celebrated the best of the best at the 2025 Fencing Industry Awards, providing the opportunity to honour both rising talent and industry stalwarts.

B+LNZ launches AI assistant for farmers

Beef + Lamb New Zealand has launched an AI-powered digital assistant to help farmers using the B+LNZ Knowledge Hub to create tailored answers and resources for their farming businesses.

National

Machinery & Products

JDLink Boost for NZ farms

Connectivity is widely recognised as one of the biggest challenges facing farmers, but it is now being overcome through the…

New generation Defender HD11

The all-new 2026 Can-Am Defender HD11 looks likely to raise the bar in the highly competitive side-by-side category.

» Latest Print Issues Online

Milking It

Buttery prize

OPINION: Westland Milk may have won the contract to supply butter to Costco NZ but Open Country Dairy is having…

Gene Bill rumours

OPINION: The Gene Technology Bill has divided the farming community with strong arguments on both the pros and cons of…

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter