The system phases out the complicated payment structure for one based on five spring months and seven months of off-peak pricing.
The company informed its farmer suppliers today.
Fonterra’s new system follows significant industry pressure for change and for processors to remove the confusion in milk pricing.
The company’s incentive for growth in milk production plus its seasonal payment and seasonal ratio payments have been rolled into the base price and off-peak payment.
The structure will still be paid as cents a kilogram milk fat and protein.
The spring price will be announced nearer to next season.
Source: Weekly Times