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Fonterra to pay further 10c dividend

NZ NewswireNZ Newswire 17/08/2016

Fonterra's farmers have had some good news, with the company announcing it will pay a further 10 cents per share of its previously forecast 40 cents per share dividend.

Company chairman John Wilson says the co-operative always intended to declare a further dividend this month after bringing forward an earlier dividend payment last financial year to deliver quick cash to farmers.

"We are seeing early signs of the expected recovery in dairy prices but we know conditions on farm are challenging," he said.

It comes as the GlobalDairyTrade auction this week gained 12.7 per cent, pushing the average price to $US2731 ($NZ3763) per tonne in what experts labelled a good sign for the industry struggling with low milk prices.

"It was a stunning result and it couldn't have come at a abetter time for our farmers. I think it is now safe to say the market has turned a corner," AgriHQ dairy analyst Susan Kilsby said.

Mr Wilson said there was no change the forecast earnings range or our forecast total dividend of 40 cents per share this financial year.

The total payout will be announced next week, at the same time as Fonterra confirms its end of season farmgate milk price, earlier tipped to be $4.25 per kg of milk solid.

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