19 Sep 2009

Milk price details wanted from Fonterra

8:28 am on 19 September 2009

Federated Farmers wants details on how Fonterra plans to set its milk price.

The company on Friday announced a three-stage proposal to allow farmers to buy additional shares, to strengthen its capital structure. At present, shares are linked to milk production.

Federated Farmers says the proposal is a step in the right direction and the main concern for farmers is how the milk price is set.

Dairy section chairman Lachlan McKenzie says the mechanism must be clear and transparent for all parties.

Fonterra chairman Sir Henry van der Heyden says he is confident farmers will give the share offering their support. He says the share offering could realistically net more than $400 million.

Chief executive Andrew Ferrier says the money will be used to repay debt and will also go towards investing in growing the co-operative.