Fonterra payout to fall?

ANZ economist Con Williams thinks the strong New Zealand dollar will increase the pressure for Fonterra to cut the forecast milk payout.

The board won’t make a decision until its September meeting but prudent farmers will continue to keep costs down just in case.

One factor which might help the price of milk is the drought in the USA.

Peter Griffin at Sciblogs has an infographic of the impact of the drought which shows a likely increase in dairy prices of 3.5 – 4.5%.

3 Responses to Fonterra payout to fall?

  1. Last week I saw Synlait’s latest newsletter. Note this was before the last auction which saw a 3.5% increase in prices. It said milk price was at worst place since low point of 2009 when payout ended on $4.72, however, factoring in present day conditions and exchange rate that translated to only $4.15 currently. Note, the newsletter very clearly stated they were not saying this low figure would be the payout for 2013, just that it was where the commodity price was now.

    You will no doubt realise that is a very scary figure. And you’re right, the US drought might help in the medium term.

  2. homepaddock says:

    Mark, that’s a very scary figure.

  3. It was Synlaits July 2012 monthly report … if you want a copy just drop me a line and I’ll email: mhubbard@ihug.co.nz

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: