Monday, 10 December 2012 12:49

Fonterra lifts payout

Written by 

Fonterra has lifted its 2012-13 forecast payout by 25c.


The payout forecast range for the 2012-13 season now is $5.90 - $6.00 before retentions for a fully shared up farmer.


This includes a hforecast Farmgate Milk Price of $5.50/kgMS, up from $5.25 on the previous forecast. It is forecasting a net profit after tax range of 40-50 cents per share, consistent with the recent Fonterra Shareholders' Fund Offer prospectus.


The co-op has also announced a 40 cent increase in advance rate payments to farmers.
Fonterra is required to consider its Farmgate Milk Price every quarter as a condition of the Dairy Industry Restructuring Act (DIRA).


Fonterra chairman Henry van der Heyden says after considering farmer shareholders' cash flow requirements, and the strength of the cooperative's balance sheet after the launch of TAF, the board had also decided to lift advance rate payments to farmer shareholders.


"The immediate effect of this decision is that our farmers will have more money flowing into their bank accounts from late January when they are paid for the previous month, and that will help them with their cashflows.
"Between 1 August and the most recent GlobalDairyTrade (GDT) trading event, prices have increased by an average 17.7 per cent. While there was a drop at last week's GDT event, it has not changed our overall commodity price forecasts."


Chief executive Theo Spierings says Fonterra's strong balance sheet meant that from a cash flow point of view the cooperative was in a position to increase payments to farmers over the next few months without any significant risk to its financial stability.


While the outlook for any movements in the New Zealand dollar exchange rate were neutral, the impact of weather events in other markets were likely to support the lift in forecast Farmgate Milk Price.
"There has been a persistent, serious drought in the United States. That has pushed up the price of grain, which in turn affects dairy production. There are also concerns about drought in the Ukraine and Russia. In South America, extreme wetness in parts of Brazil and Argentina could also depress wheat production," says Spierings.
"Given current global conditions, our forecasting anticipates global dairy prices are likely to move higher in the first half of 2013."

More like this

Fonterra trims board size

Fonterra’s board has been reduced to nine - comprising six farmer-elected and three appointed directors.

Returns 'not good enough'

Fonterra leaders are making their case for offloading the co-operative's $3 billion consumer business, noting that its return on capital has been nowhere near respectable.

Record milk price!

A record farmgate milk price for Fonterra shareholders is all but confirmed for this season.

Chinese strategy

OPINION: Fonterra may have sold its dairy farms in China but the appetite for collaboration with the country remains strong.

Featured

Massey Research Field Day attracts huge interest

More than 200 people turned out on Thursday, November 21 to see what progress has been made on one of NZ's biggest and most comprehensive agriculture research programmes on regenerative agriculture.

Expo set to wow again

Stellar speakers, top-notch trade sites, innovation, technology and connections are all on offer at the 2025 East Coast Farming Expo being once again hosted in Wairoa in February.

A year of global challenges

As a guest of the Italian Trade Association, Rural News Group Machinery Editor Mark Daniel took the opportunity to make an early November dash to Bologna to the 46th EIMA exhibition.

National

Winter grazing warning

Every time people from overseas see photographs of cows up to their hocks in mud it's bad for New Zealand.

ANZ defends farm lending rates

The country's largest lender to the agriculture sector says it's not favouring home loans over farm and business lending.

Machinery & Products

Expo set to wow again

Stellar speakers, top-notch trade sites, innovation, technology and connections are all on offer at the 2025 East Coast Farming Expo…

A year of global challenges

As a guest of the Italian Trade Association, Rural News Group Machinery Editor Mark Daniel took the opportunity to make…

» Latest Print Issues Online

The Hound

Review SOEs!

OPINION: NIWA has long weathered complaints about alleged stifling of competition in forecasting, and more recently, claims of lack of…

Bank reset

OPINION: Adding to calls to get banks to 'back off', NZ Agri Brokers director Andrew Laming has revealed that the…

» Connect with Rural News

» eNewsletter

Subscribe to our weekly newsletter