By PHILIPPA STEVENSON
Dairy farmers have got a consolation Christmas gift with the forecast of an improved payout but the big prize of the mega merger is still under lock and key.
The Dairy Board is understood to have advised companies yesterday of a 5c to 10c rise in its predicted
end-of-year payout, lifting the projection to $3.20 to $3.30 per kilogram of milksolids.
The improvement, which will be welcomed by farmers, is the result of a 9 per cent rise in milk production, strengthening demand and rising prices in the market place plus a favourable exchange rate for the exporter.
Meanwhile, Dairy Board chairman Graham Fraser was the only one commenting after yesterday's meeting of industry leaders, which he called to help fast track the mega co-op business plan.
"It was a worthwhile meeting to keep matters moving forward and that was essentially what it achieved," he said.
The chairmen of Dairy Group and Kiwi, whose stalled merger talks prompted the gathering, declined to comment.
One observer suggested that no news could be good news for supporters of the industry integration proposal because at least the companies had not announced their negotiations had failed.
Mr Fraser said the business plan, which will show farmers the expected benefits of the mega co-op, would be completed early in the new year.
If the two companies fail to merge it is likely they will become processing and marketing competitors, with one incorporating the Dairy Board into its structure.
However, Mr Fraser said the possibility of the board revealing figures to a potential competitor during preparation of the business plan was not a major concern.
"The thrust here is to get a conclusion to the MergeCo negotiations. While we are always aware of those sort of factors, our first priority is to get success in the merger."
