Fonterra has revised its forecast payout for this season down by 30 cents to $6.45- $6.55 before rententions.
It’s also announced an opening forecast of $5.95 – $6.05 before retentions for next season.
The updated forecast Payout range for this year comprises a lower forecast Farmgate Milk Price of $6.05 per kgMS and a forecast Net Profit after Tax range of $570-720 million, equating to 40-50 cents per share.
As a consequence, Fonterra forecasts that a 100 per cent share-backed farmer will earn on average in the range $6.45-$6.55 per kgMS before retentions.
CEO Theo Spierings said the lower forecast Farmgate Milk Price was due to continued softening of commodity prices.
“The Global Dairy Trade trade weighted index has declined 20.3% since our last Farmgate Milk Price forecast of $6.35 in April,” said Mr Spierings.
“Dairy production levels in the US and Europe are high, while we continue to have higher-than-normal production levels from New Zealand. All this is occurring at a time of heightened uncertainties in global markets.”
Mr Spierings said with the softening of global commodity prices, operating earnings were expected to be marginally ahead of 2011.
The grapevine has been suggesting next season’s payout could have been as low as $4.50. the opening forecast of more than a dollar higher than that is a relief but nothing is certain and that will put pressure on budgets.
Homepaddock 