29 Jan 2009

Farm revenues keep falling

8:46 am on 29 January 2009

The Fonterra Farmers Shareholders' Council is disappointed at how far the forecast milk payout has fallen since last season.

Fonterra announced on Wednesday that farmers can now expect $5.10 per kg of milk solids - a fall of 90 cents from the previous forecast of $6 per kg.

The opening forecast was $7 per kg. Fonterra paid a record $7.66 per kg last season.

Although Fonterra had signalled extra pressure was being put on the payout by global financial and market conditions, Shareholders Council Chairman Blue Read said the drop of 90c per kg will be more than what some farmers were expecting.

He says the reduction in farm revenue is more than 25% for the season to date.

Mr Read says dairy farmers are used to fluctuating forecast adjustments and the uncertainty that comes with them, but they would like to see more timely updates for the payout predictions in this sort of environment.

He told Morning Report they would appreciate monthly - rather than quarterly - updates.