A strong start to the season and continued high international milk prices has resulted in Westland Milk Products lifting its 2013/14 forecast to $7.60 – $8 per kilo of milk solids (kgMS) before retentions. This is a dollar more per kgMS than the company’s first forecast in May. The advance rate has also increased to $5 per kgMS, payable 20 September 2013.
Westland is New Zealand’s second biggest dairy cooperative with more than 300 shareholders on the West Coast, and 34 in Canterbury, with a turnover of some $600 million.
Chief Executive Rod Quin says the 2013/14 season has started strongly with milk flows up five per cent on budget. “The mild winter means we have come into spring with cows in good condition and plenty of grass which means our farmers are well set up for a productive season. While it’s early days yet there is real promise that this will continue.”
Quin says the forecasted pay out was also boosted by the fact that international prices have continued to increase, with the market largely unaffected by recent industry product issues.
“Current market conditions, plus Westland’s strategic move to the higher value nutritionals market is driving this confident pay-out forecast,” Quin says. “We’ve had a very successful launch of our new Westpro Nutrition products in China recently, and fully expect the new nutritional products plant in Hokitika to be working to capacity this season. All this is very good news for our shareholders and the local economies.”
Forecast payouts are that, forecasts.
But our two biggest dairy co-operatives, Fonterra and Westland, wouldn’t be increasing their forecast payouts if they weren’t confident that demand for and the price of their products was going to hold up.