Westland Dairy has dropped its forecast payout by 20 cents per kilo to a range of $6.00 to $6.20.
“Fluctuations in payouts are normal and certainly not unique to Westland or this season,” chairman Matt O’Regan said in a statement. “The volatility of the New Zealand dollar remains high and the spot (exchange) rate strengthened recently, which results in fewer New Zealand dollars available for pay-out.”
Fonterra, Westland’s major competitor, lowered its forecast by 30 cents to $6.05 a couple of months ago.
Falling milk prices for producers don’t automatically result in lower costs for consumers.
Lower milk prices and a 37% drop in the price of coffee beans since a high in April last year hasn’t resulted in cheaper coffee.
But the beans and milk are probably the smaller part of the overall cost of a cup of coffee. This was discussed by the panel on RadioNZ yesterday .