Hokitika's Westland Milk has raised its 2004-2005 season payout to level-peg with industry giant Fonterra despite a "terrible" year for farmers.
The West Coast dairy co-operative has increased its forecast of $3.85-$4 per kg of milk solids to $4.25, thanks to buoyant dairy commodity prices.
Westland chief executive Barry Richardsonsaid other benefits enjoyed by the company's suppliers - including larger upfront payments - were worth an estimated 5c/kg on top of the payout.
This puts it on a par with Fonterra, which raised its forecast from $4.05 to $4.30 late last year.
Richardson said the number of cows supplying the firm had grown by 9000 to 120,000 but milk production was down about 15 per cent due to the weather.
"Our suppliers have had a terrible year.
"We just haven't been getting the grass growth."
But a significant increase in commodity prices had offset both the poor growing season and the impact of the strong kiwi dollar.
Westland is a minnow in the dairy business, its 348 suppliers dwarfed by Fonterra's 12,000.
