It increased its expected payout for the current 2016/17 season to $6.15 per kilogram of milk solids, up from its previous forecast of $6, and also raised its initial forecast for the upcoming 2017/18 season to $6.50.
It confirmed its forecast earnings per share range of 45 to 55 cents for the 2017 financial year, and retained its target for a full-year dividend of 40 cents per share.
The country’s dominant milk processor is hiking its forecast payments to farmers as global dairy prices recover amid declining milk production in key exporting nations and as demand picks up from major markets like China. That provides a welcome to boost to farmers who have endured two seasons of milk prices below the level needed for most to break even.
«World dairy prices have risen in recent months and as we near the end of the season we have more visibility and certainty which makes us confident of our $6.15 position,» chairman John Wilson said.
«The increase in the forecast milk price for the current season and the improved forecast for 2017/18 will be welcome news for our farmers following two challenging seasons on farm.»
Fonterra paid its farmer suppliers $3.90 last season and $4.40 the previous season.
The cooperative expects its milk collection from farms to be 3 per cent lower in the current 2016/17 season compared with last season.
Fonterra said its revenue in the first nine months of its 2017 financial year is up 8 per cent at $13.9 billion compared with the same period a year earlier, as a result of higher milk prices.
Source: Tvnz
Link: https://www.tvnz.co.nz/one-news/new-zealand/fonterra-lifts-forecast-payout-dairy-farmers-prices-rise
