24 Sep 2008

Lower dairy payout expected

8:50 am on 24 September 2008

Fonterra is expected to announce a lower prospective payout for dairy farmers on Wednesday.

Westpac Bank agriculture economist, Doug Steel told Morning Report that last season's payout of $7.90 per litre of milkfat solids is expected to be lifted by perhaps 20 cents.

Fonterra earlier forecast a decline to around $7 for the current season.

Mr Steel also said analysts will be looking for indications as to what damage the contaminated Chinese milk scandal could have on Fonterra's future.

Fonterra's payout last season pumped over $10 billion into the New Zealand economy.