You are using an older browser version. Please use a supported version for the best MSN experience.

Fonterra tips higher payout for farmers

NZ NewswireNZ Newswire 25/05/2016

Dairy giant Fonterra is forecasting its payout to farmers for the coming season will be $4.25 per kilogram of milk solids.

It is a 35 cents per kilolgram increase in the payout for the current season which was confirmed at $3.90/kgMS.

Despite the lift in the forecast for the 2016/17 season it remains below the $5/kgMS level that is the break-even point for many farmers and was below the $4.50/kgMS tipped by some economists.

There has been a ray of light for farmers of late with prices at the fortnightly GlobalDairyTrade auction rising three times in the last four auctions.

"We are expecting global dairy pricing to gradually improve over the season as farmers globally reduce production in response to ongoing low milk prices, however we continue to urge caution with on-farm budgets," said Fonterra chairman John Wilson.

An oversupply and weak demand has hit dairy prices in recent years after a bumper payout of $8.40/kgMS in the 2013/14 season.

image beaconimage beaconimage beacon