By LIAM DANN
Fonterra has not given up on boosting farmer payouts back to $5 per kilogram of milk solids, says chief executive Andrew Ferrier.
Remarks at a dairying conference in Invercargill last month had been misinterpreted by some commentators as signalling that $5 payouts were gone for good, Ferrier said.
It was
still "absolutely" Fonterra's aim to get payouts to $5 and beyond.
Farmers will be paid $4.23 for the 2004 season compared to $5.33 in 2002.
The real message was that high payouts based on commodity price fluctuations were not sustainable, said Ferrier.
"We do think that price spikes are unhealthy," he said.
"Because when you get an upward spike in prices it tends to reduce demand for dairy and has a negative impact on the long-term stable growth plan."
But that did not mean farmers could not expect $5 payouts again - eventually.
"I would like to see us north of $5 but with a fundamentally different mix: more value added and less base commodities.
"I don't want to see us north of $5 just because we are taking advantage of the last few cents of a price spike."
In the past six months, world prices for dairy commodities had soared back towards the record highs of 2002.
Fonterra was now using its weight on the global market to try to prevent a "panic spike", Ferrier said and not trying to drive prices higher.
