6 Jul 2012

Westland Milk Products drops milk payout

2:15 pm on 6 July 2012

Dairy processor and exporter Westland Milk Products is blaming a stubbornly high New Zealand dollar for being forced to lower its milk payout again.

The independent co-operative company has reduced its forecast payout for the 2011-12 season by a further 20 cents per kilogram of milk solids to a range of $6 - $6.20. The season for Westland ends this month.

That compares with Fonterra's current milk price forecast of $6.05 per kilogram of milk solids with a dividend of 40 - 50 cents a share on top of that.

Last season, Westland Milk Products paid out $7.80 per kilogram of milk solids.

Chief executive Rod Quin says while there is downward pressure on global dairy prices, the exchange rate is the main factor influencing the payout for this season.

Mr Quin says the message to dairy farmers is that the 2012-13 season is going to be hard.

The processor is forecasting a further reduction in next season's payout with a range of $5.70 - $6.10.

That compares with Fonterra's opening milk price forecast of $5.50 with a profit range of 45 - 55 cents a share.