Waikato dairy company Tatua has declared a bumper farmer milk payout of $7.50/kg milksolids for the 2012 season, putting dairy giant Fonterra’s in the shade in a hark-back to industry payout rivalry of old.
In addition the specialist product company announced it was retaining pre-tax 54c/kg, implying it had enough in the kitty to make a $8 payout if desired.
Fonterra this week announced a 2012 milk payout of $6.08/kg, 3c more than expected but $1.52/kg less than its 2011 milk payout.
Fonterra’s total payout including dividend for a fully shared up farmer was $6.40.
Westland Milk Products also announced its payout today, delivering its farmers $6.14/kg, in the mid range of the company’s most recent forecast.
The payout is 14 per cent down on the company’s season opening forecast of $6.70-$7.10.
Tatua, a minnow compared to some of its processing competitors, for many years was an industry payout leader.
Before Waikato-based New Zealand Dairy Group was rolled into the mega-merger that formed heavyweight Fonterra in 2011, payout rivalry between the regional players and others in the industry was fierce.
Tatua chairman Stephen Allen said the 54c/kg retention would ensure the company retained its financial strength in the volatile global economic climate.
Despite the robust earnings payout to its farmers, Tatua was able to make substantial investments in new facilities and plant during the year, Allen said.
It completed construction and commissioning of a new plant to product lactose solids, turning out its first product for sale on August 1 on schedule.
A new hydrolosis plant was also built. It is expected to start producing commercial product for sale by November.
Milk supply from its 87 farmers was 13.2 million kg of milksolids, up 9.5 per cent on the previous year.