Today’s increase in Fonterra’s forecast payout was unexpected and has raised a couple of questions:
- Given last year when an increase in the forecast price was proved to be premature and later reversed, wouldn’t it have been more prudent to wait to make sure the upward trend in demand for milk is going to continue?
- Why make the announcement today, instead of waiting until tomorrow when the company will present its annual results?
The cynic in me thinks these are valid concerns but the optimist is hopeful that Fonterra learned from last year and its forecast will prove to be at worst accurate and might even be conservative.
Dairying has had a couple of tough seasons, the impacts of which have spread off-farm.
Today’s 50 cent lift in the forecast payment has provided more than a glimmer of light at the end of the tunnel and I’m grateful for that.