Fonterra lifts 2009/10 payout forecast by 55c/kgms

The average dairy farmer stands to make an extra $55,000 on the back of the increased pay-out from dairy giant Fonterra reports The NZ Herald. Fed Farmers dairy chairman Lachlan McKenzie said the extra $55,000 gross makes up for the $53,000 loss that the average dairy farmer had last year. "People don't realise, they think the average farmer is getting a half-a-million dollar income but they have to pay all the wages and bills out of that," said McKenzie. He said the loss last year hurt farmers but the increase pay-out from Fonterra will go some way to improving the balance sheet this year. Fonterra announced today that it would lift its pay-out forecast to its farmers by 55 cents to $5.10 per kilo of milk solids. Fonterra chairman, Henry van der Heyden, said the revised forecast for the 2009/2010 season reflected "a sustained improvement in commodity returns and a more positive outlook in international dairy markets." He said farmers would begin to benefit from the higher pay-out forecast from next month, with a lift in the co-operative's "Advance Rate" payments to farmer-suppliers. Federated  Farmers president Don Nicolson said the announcement was great news. But just before you break out the champagne, [the pay-out] is still less than the one at the end of last season," Nicolson said. He said farmers were finding it tough, coming off the end of the drought. Fonterra chief executive , Andrew Ferrier said the strong increases in prices for whole milk powder at the recent auctions showed "a broad strengthening of demand and robust recovery in international dairy prices." "What we're seeing in the international market is the firming of a trend, with a more positive sentiment and stronger demand, producing better pricing across the board. Chairman van der Heyden said the level of the NZ dollar, which had been trading around 70 cents US, remained a concern but this has been fully factored in to the revised 2009/10 forecast.