2 Apr 2013

Fonterra defers charges because of drought

10:33 am on 2 April 2013

Fonterra has brought its drought-embattled dairy farmers some relief by deferring charges imposed if the amount of milk they supply is out of kilter with their forecasts.

Fonterra's suppliers are required to forecast how much milk they will deliver in a season to help the co-operative plan and manage its processing.

But Federated Farmers dairy vice-chair Andrew Hoggard says the drought is posing more than a few challenges to that, with milk volume forecasts being undershot in the North Island especially.

He says Fonterra has responded to farmers' concerns by deferring payment of the capacity adjustment penalties until late October, when suppliers will get their final payout and dividend for the current season.

Mr Hoggard says that will be a relief for some farmers who are facing fairly large charges.