Fonterra comments on international dairy prices

Fonterra confirmed today that a strong New Zealand dollar and further drop in international dairy prices meant that the Board would be reviewing the current 2010/11 payout forecast.

Following the globalDairyTrade event overnight, the gDT-TWI index was down 8.3%. This followed a 13.7% decline at the July event.

“Encouragingly, Whole Milk Powder had strengthened slightly for the February to April period,” said CEO Andrew Ferrier. “But, the New Zealand dollar was at very high levels.”

Mr Ferrier said that as part of its normal planning process Fonterra is reviewing the current forecast in light of these developments.

“We always said there would be a lot of volatility in the market and we are seeing it. It’s important in this environment to let our farmer-shareholders know as soon as possible if we think there could be any impact on payout.”