Timing of Fonterra milk price revision irks

Michael Woodward

The timing of Fonterra's latest farm-gate milk price revision has left local farmers feeling a bit miffed.

Federated Farmers North Canterbury dairy chairman Michael Woodward said he was surprised by the timing of last week's announcement that Fonterra had lowered its forecast 2017-18 milk price from $6.75 per kilogram of milk solids to $6.70/kgMS.

With local farmers already halfway through calving for the latest 2018-19 season, Mr Woodward said the timing was unusual.

''It's not what farmers wanted to hear, but in the grand scheme of things 5 cents is not a big drop. Anything over $6 is still a good price.

''It's just surprising they're announcing it so late in the piece. I would have thought they would have known months ago what the financial position is.''

Mr Woodward said the price drop appeared to be due to the business performance rather than the quality of the product, so he would have expected a drop in the share payout rather than the milk price payout.

Fonterra indicated the previously announced 25c-30c a share payout range had been held, but indicated this could change and it was possible the full-year dividend would be just the 10c already paid in April.

The co-op's full-year results will be announced on September 13.

Mr Woodward said he hoped it was a one-off and not a sign of things to come.

He said calving had started well and the late winter weather had been ''a stunner''.

For now there was plenty of moisture and feed around, but last year's experience, following on from three summers of drought, had taught farmers how quickly the situation could change, he said.

-By David Hill

Central Rural Life