KEY POINTS:
The tiny West Coast dairy co-operative, Westland Milk Products, has announced a record payout of $8.29/kg milksolids - the highest in the nation and unlikely to be bettered for years.
Company chairman Ross Scarlett said yesterday the figure included costs paid on behalf of suppliers (2c/kg milksolids) and an average colostrum payment of 5c/kg milksolids.
Industry giant Fonterra has paid its farmers $7.90 for the same season, and Tatua Co-operative Dairy Company yesterday announced a payout of $8/kg for its 112 farmers.
The Hokitika-based Westland's distributable surplus was $356 million for the 2007-08 season.
"Those figures add up to a company performance of $8.29/kg milksolids, a result ahead of projections the company has been making to suppliers during the season," Scarlett said.
He said shareholders were likely to be "more than satisfied", even though the co-operative had retained 30c/kg for future investments. Fonterra retained 24c/kg and Tatua 37c/kg.
Scarlett said a strong performance by the company played a significant part in the result, but added: "Obviously, buoyancy in international markets was chiefly responsible for the record payout."
EasiYo, a yoghurt company acquired by Westland during the 2007-08 season, was performing well ahead of projections and would be moving to new premises in Auckland, doubling its capacity.
But the record payout comes just as Westland was plunged into uncertainty over low-level contamination of at least one batch of its highest-priced product, lactoferrin protein powder.
Food safety officials are investigating whether the contamination is coming from the proprietory production process, which Westland acquired in 2002 from Tatua, where contamination has also been found, at levels as high as 4 parts per million.
Westland is forecasting a payout in the $6.70-$6.95/kg milksolds for the current 2009 season. Fonterra's forecast is $6.60/kg.
- NZPA
