22 May 2020

Dairy farmers' payout expected to drop next year

From Morning Report, 8:46 am on 22 May 2020

Dairy farmers may have to tighten their purse strings, as they are due to get a lot less for their milk next year.

The dairy giant Fonterra has battled through the coronavirus pandemic, reporting a $300 million increase in earnings for the third quarter.

However, it's coming out of the extremely tough economic conditions it was dealt by asset sales, cost cutting and debt reduction.

The payout for the current season is expected to be between $7.10 and $7.30 per kilogram of milk solids.

Next year's outlook is worse for farmers, as they are forecast to get between $5.40 to $6.90 a kilogram.

Chris Lewis is the dairy spokesperson for Federated Farmers.