Fonterra has lifted its forecast payout to farmers, saying it expects to see world dairy prices to increase next year. Photo / NZ Herald
Fonterra , which raised $525 million through a unit trust for external investors last month, has hiked its forecast payment to farmers and expects to see more gains in global dairy prices next year.
The dairy cooperative increased its forecast farmgate milk price by 25 cents to $5.50 per kilogram
of milksolids and held the expected dividend payment of 40 cents to 50 cents per share, the Auckland-based exporter said in a statement. Fonterra also increase advance rate payments to farmers by 40 cents after the Shareholders' Fund float strengthened its balance sheet and reduced redemption risk.
"The immediate effect of this decision is that our farmers will have more money flowing into their bank accounts from late January when they are paid for the previous month, and that will help them with their cash-flows," outgoing chairman Henry van der Heyden said.
Units in the Fonterra Shareholders' Fund fell 1.1 percent to $6.55. The units were sold at $5.50, and climbed as high as $6.95 in their first day of trading in a flurry of investor demand. Fonterra shares, which farmers can trade among themselves, were unchanged at $6.61.
Chief executive Theo Spierings said the outlook for the kiwi dollar was neutral and drought concerns in the US, Ukraine and Russia, and extreme wetness in Brazil and Argentina has hit wheat and grain prices which feed into dairy.
