Fonterra Interim Result in a ‘Season of Two Halves’28 March 2013
NEW ZEALAND - Farmer supplier-shareholders of Fonterra Cooperative Group will cheer its Net Profit After Tax increasing 33 per cent.
While the cooperative is increasing its forecast milk price to farmers by 30 cents per kilogram of milk solids (kg/MS), Federated Farmers cautions it will not be enough to make up for the effects of the drought- especially in the north island.
“Drought has made this a season of two halves,” says Andrew Hoggard, Federated Farmers Dairy Vice-Chairperson.
“We were having a good season up until February when the effects of drought really started hitting home.
“At my farm I was ahead of last season by five percent but by the end this season I now expect to be ten percent down. Extend that to other farmers in the North Island and you can see that things are far from flash.
“We must give full marks to Fonterra for increasing the milk price forecast from NZ$5.50 to NZ$5.80 kg/MS. With the dividend on top it will make a bad end to the season slightly more bearable.
“The NZ$100,000 on average Fonterra says supplier-shareholders will get due to the faster advance rate paid and the forecast payout increase has already been spent. This money and more will need to be ploughed back into our farms so it makes for a subdued provincial economy.
“It would also be wrong to say the uplift in the forecast will get us out of the woods. If I use my farm as an example, I would need an increase of 50 cents kg/MS just to offset the drought.
TheMeatSite News Desk