Fonterra to review payout

Fonterra will review its payout to farmers next week after a 13.7 per cent rise in this morning's online auction of whole milk powder reports Stuff. The average price on whole milk powder sold on globalDairyTrade rose for the fourth consecutive month to US$3437 (NZ$4758) per tonne, US$415 per tonne higher than the October auction. Today's result could be seen as a vindication of the auction criticised by Open Country Dairy for forcing prices down during the depths of the downturn because it was too transparent. Nigel Kuzemko, Fonterra's commercial and strategy director, could not say how the rise would impact Fonterra's forecast of $5.10 per kg of milksolids, which was revised from $4.55 after the September rise.  Mr Kuzemko said Fonterra's board would announce any change next week if the forecast shifted by 30 cents or more in either direction.  "Customers, which include multi-nationals, nationals and regional players, are seeing an increase in price. Some are beginning to feel they need to be prudent in their buying patterns and are beginning to take the opportunity to restock,'' Mr Kuzemko said. "It's still been pretty fragile. It's not robust growth.'' Fonterra, which sells about 10 per cent of its output on golbalDairyTrade and uses the price to benchmark its product, traded anhydrous milk fat on globalDairyTrade for the first time this morning and achieved an average of  US$4757 per tonne after asking a starting price of $3060 per tonne.