By LIAM DANN
Tiny independent dairy company Westland Milk Products will pay its farmers $3.97/kg of milk solids - beating the payout of dairy giant Fonterra for the third season in a row. Last month Fonterra announced a payout of $3.63/kg.
Westland's final payout is in line with forecasts of $3.90/kg
but down on last season's $5.43/kg.
The final figure includes a 7.5c tax credit and 3.6c industry levy so the net payout to farmers will be $3.86.
Westland chairman Ian Robb said that a drop in commodity prices and unfavourable currency movements meant returns were lower this year.
He said the result reflected a strong manufacturing and marketing performance by the company, and its total revenues of $186 million were in line with the previous year's record result.
Fonterra director of sales and operational planning John Shaskey said the Westland result was expected.
Westland had a significant advantage over Fonterra as it manufactured mostly milk powder, which was the highest returning commodity product last year.
The company had not used any of the $109 million it received for its Dairy Board shares to prop up the payout, said Robb.
Last season Westland produced a record 352 million litres of milk, up from 337 million litres previously.
Robb said a new milk powder drier commissioned at the start of the season had performed well and the company would continue to invest in technology so it could produce high-value nutritional and ingredient products.
Westland has 373 farmers compared with Fonterra's 12,600. Last month New Zealand's other independent dairy company, specialist producer Tatua, paid its farmers $5.60/kg of milk solids.
