Revised payout no reason to panic

Federated Farmers says Fonterra’s decision to revise down it’s payout by 45 cents to $6.30 per kg of milk solids is unfortunate, but thanks the cooperative for being upfront about the situation and giving its farmers plenty of warning.

“Farmers were told a couple of weeks ago to expect a downgrade in the payout forecast due to weakened global commodity price trends at the moment,” Federated Farmers Dairy chairman Willy Leferink says.

“While it is a blow for dairy farmers, they have seen this happen before and will be prepared to weather any economic turbulence. As well as being warned by Fonterra, they will have been watching the strong New Zealand dollar and the lower results on the globalDairyTrade auction and will have adjusted their spending accordingly.

“The good news is that the longer term out look for dairy remains strong and Fonterra’s profit forecasts for this year remain safe,” Mr Leferink concluded.