31 May 2013

Westland dairy co-op announces milk price forecast

8:32 am on 31 May 2013

West Coast based dairy co-operative Westland Milk Products has announced an opening milk price forecast for the new season in the ballpark of Fonterra's forecast announced on Wednesday.

Its payout prediction for the 2013-14 season is $6.60 to $7 per kilo of milk solids, an increase of 60 to 70 cents on the current season.

That compares with Fonterra's new season opening forecast of $7 a kilo, with a dividend to come on top of that.

The Hokitika-based co-operative also confirmed its forecast payout for the current season of $6 to $6.30 a kilo.

Fonterra's current season forecast remains at a combined milk price and dividend of $6.12.

Dairy farmers on the West Coast are delighted with the forecast payout.

Federated Farmers West Coast dairy chair Richard Reynolds says it is just what the doctor, or rather the accountant, ordered.

Westland chief executive Rod Quin says its new season forecast, like Fonterra's, is based on the expectation that strong international dairy prices will continue into next year.

Mr Quin says milk supply that Westland is now getting from Canterbury - 15% to 20% of its total - has more than compensated for the drop in production on the West Coast from the drought this summer.

However, he says the high value of the New Zealand dollar remains an issue, as it is contributing to the volatility of the dairy export market and this affects the timing and value of final contracts under negotiation for the current season.