10 Dec 2012

Fonterra lifts payout

12:26 pm on 10 December 2012

Fonterra has lifted its payout forecast for the 2012/13 season, following the launch of its shareholders fund.

In a quarterly review of milk prices on Monday, Fonterra predicted a price of $5.50 per kg of milk solids.

That's an increase of 25 cents per kg, with a dividend payment of 40 - 50 cents per share on top of that.

Chairman Sir Henry van der Heyden said Fonterra decided to lift advance rate payments after the launch of Trading Among Farmers strengthened its balance sheet.

Prices on Fonterra's global dairy auction fell 2% last week, but the outlook remains strong due to the continued effect of the US drought on grain prices.

Since August, dairy prices have increased by an average of 17.7%.

World dairy prices are expected to strengthen throughout 2013 once Europe and the United States step back from the fiscal cliff.

Fonterra shares on Monday were down more than 1%, or seven cents to $6.55 each.