Dairy farmer payout gets better

By PHILIPPA STEVENSON agricultural editor

Dairy farmers have received more good news with the big two - New Zealand Dairy Group and Kiwi Dairies - lifting their end-of-season payout projections.

Last week, the Dairy Board raised its expected final payout to $4.50 a kilogram of milksolids, and now both companies expect to add up to 30c to that.

The full payment to farmers will be around a dollar more than last year.

Dairy Group chairman Henry Van Der Heyden said the record payout reflected strong international prices and demand for dairy products, a favourable exchange rate and the company's efficient use of record milk flows.

Dairy Group suppliers are expecting their payout to rise even higher when the season ends on May 31.

Kiwi also raised its expected payout to $4.80 a kilogram.

Chairman Greg Gent said the international market appeared to have peaked but prices were expected to remain stable at least until the end of the season.

Meanwhile, Dairy Group subsidiary New Zealand Dairy Foods has acquired 50 per cent of the Blenheim milk processing plant, Marlborough Milk Company Ltd.

The move comes after Kiwi's Mainland Products said on Monday that it would close Nelson's town milk supplier, Nelson Milk, in a month. Its main brand is Meadowfresh, while the Marlborough Milk plant will supply Anchor.

Dairy Foods chief executive Peter McClure said he expected that volumes would increase this year as Marlborough Milk became the production and distribution centre for Anchor in the Marlborough and Nelson districts.

The company would continue to run as a stand-alone operation, but its product would bear the Anchor logo, he said.

Dairy Foods bought 10 per cent of Marlborough Milk's assets last year and Marlborough Milk has produced Anchor milk since November.