The world credit crunch hit home for West Coast dairy farmers as their co-operative readjusted their predicted payout downwards to $4.10-$4.50/kgms. The $8.29 payout last year is now just a distant memory but the author believes the situation is worse than the $4+ predicted payout. An angry Westland supplier reported the co-op is asking suppliers for .90c/kgms back from last years payments as the companies debt grows close to its banks conditions. Equally galling according to this supplier is the 25% increase in directors fees, in a year which suppliers will find very tough financially. Fonterra directors cancelled their fee increase and Westland directors should do the same. With a downturn in the tourist numbers the West Coast is nervous about 2009. Information supplied from management at Westland Milk Products confirmed that they were indeed asking for a repayment from suppliers because the advance payment was in excess of the readjusted predicted payout. This will be deducted from their January payment and amount to .45c/kgms for total production so far in the 2008/09 year. A decision on any further repayment in February will be made after reassessing the situation in late January. Cashflow will be tight on west coast dairy farms this summer and with national farm debt increasing( see agridata's charts) it is important that farmers communicate early with their bankers.
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