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Will Fonterra's good fortune translate into dollars?

Fonterra has boosted its pre-Christmas boost forecast payout for farmers, which would result in nearly $300 million extra flowing into Kiwi coffers.

Fonterra has boosted its pre-Christmas boost forecast payout for farmers, which would result in nearly $300 million extra flowing into the economy.

Yesterday it raised its forecast payout for the 2011/12 season 20c to $6.90-$7.

Chairman Sir Henry van der Heyden said the price reflected a modest recovery in global dairy commodity prices over the past two months and consisted of a milk price of $6.50 per kg of milksolids and a distributable profit range of 40c-50c per share.

Willy Leferink, Federated Farmers Dairy chairperson, said: “It’s not a Christmas gift yet because there’s a lot of milk still to go into our vats, but if it does hold up, it represents a big boost for every New Zealander and the taxman."

Just a couple of months ago Fonterra shaved 45c/kg off projected payouts citing falling easing prices and the strong dollar.

Yesterday its chief executive Theo Spierings said prices had edged up in three of the last four fortnightly auctions on the online trading platform GlobalDairyTrade. The GDT-Trade Weighted Index was now 5.8 per cent above its recent low in early October.

Spierings said world dairy trade growth was being led by powders (combined whole milk and skim with strong demand in emerging markets, including a number of ASEAN economies as well as Brazil, Mexico and China.

The cooperative also announced the Estimated Fair Value Share Price for the next season in 2012/13 at $4.52 per share, the same as the current season’s price.





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