20 Aug 2010

Fonterra holds payout forecast

12:43 pm on 20 August 2010

Fonterra is making no changes at this stage to its forecast milk payout for the season, despite a recent fall in international dairy prices.

The predicted milk payout is being held at $6.60 per kg of milk solids, with a dividend on top of that of 30 - 50 cents per share.

Fonterra announced it was reviewing the payout after a further fall of 85% in prices in this month's global on-line auction, for the fourth consecutive month.

Although international prices have fallen in recent months, chairman, Sir Henry van der Heyden says there are indications of a potential improvement in prices later in the year.

In view of that, he says the board has decided to hold the current milk price forecast, although he warns there's still considerable volatility in both international dairy commodity prices and the New Zealand dollar.

The Fonterra Shareholders Council has welcomed the annnouncement.

Chair Simon Couper says many farmers are still feeling the impact of the recession and the recent drought, so he says the prospect of the payout staying at the current levels will reassure them.

Fonterra will confirm its final payout for the past season, next month.