31 Jul 2014

No plans to rewrite milk price manual

7:16 am on 31 July 2014

Fonterra has no plans to rewrite the manual it uses to calculate the price of milk.

Last season Fonterra paid its farmers less for their milk than the Farmgate Milk Price Manual said it should.

Fonterra justified the move by saying products such as cheese and casein were fetching lower prices than the milk powders the manual' is based on.

Some Fonterra farmers are asking whether the flaws in the manual need to be fixed so the price they get paid for their milk is more transparent.

They say it should be the manual not the Board of Fonterra that determines the price of milk.

However chairman John Wilson said Fonterra would not be doing that.

"If you go back to 2009 we've been running the Farmgate Milk Price Manual and this past year was the first time where we've had to make this adjustment. We'll make the final announcement around that in September and be very transparent about why we've had to do that and provide the information to farmers.

"It's not our anticipation that we'll be in a position like this in the foreseeable future but you just don't know given the amount of volatility we've got."

Milk containers in supermarket trolley.

Photo: RNZ / Diego Opatowski