3 Mar 2014

Tatua challenged on top milk payout

7:02 am on 3 March 2014

The small Waikato dairy co-operative that consistently tops the milk payouts is finding it a challenge to stay up there, this year.

Tatua milk plant at Tatuanui.

Tatua milk plant at Tatuanui. Photo: PHOTO NZ

Tatua processes value-added specialty food products and bulk dairy ingredients such as caseins and anhydrous milk fat.

But it doesn't produce the main stream milk powders that are driving the forecast payouts from Fonterra and other dairy processors to record heights.

Tatua chief executive Paul McGilvary says that will tax its ability to compete on milk price this year.

He says at the beginning of the year Tatua was behind the milk powder companies in terms of the return per kilogram of milk solids.

But Mr McGilvary says as the year has gone on the price for Tatua's product mix has risen and the company is now more competitive.

But he says it will still be a big ask for Tatua to match the milk powder companies this year given the strong demand from China.

Mr McGilvary says the market is still volatile with expansion in Northern Hemisphere milk occurring at the same time as demand from China in particular is increasing, and in New Zealand very dry conditions are emerging.

Tatua dairy co-operative marked its centenary with a book launch at the weekend.