12 Nov 2014

Farmers hoping milk price no lower

7:24 am on 12 November 2014

Fonterra is holding its annual meeting in Palmerson North today and farmer shareholders will be anxious to hear what the co-operative has to say about the outlook for the rest of the season and whether the milk price will fall further.

After last season's record $8.80 per kilo payout, Fonterra is sitting on a significantly reduced forecast milk price of $5.30.

fonterra  milk powder packaging plant

Farmers want the dairy cooperative to stick with the current payout price. Photo: PHOTO NZ

Federated Farmers dairy chair Andrew Hoggard, who is a Fonterra supplier in Manawatu, said what farmers most wanted to hear is that the company would hang in there with the current price, despite what all the pundits are saying.

"There is the opportunity that they could use this to review the payout, but I'm hopeful they'll stick with 5.30 for now and hopefully we can go ahead with the season without too many more downs anyway."

Mr Hoggard said while commentators all predict that the milk payout would have to come down, Fonterra is the only one that really knows what it is selling product for and what its currency cost is.

"And if GDT (the Global Dairy Trade) remains steady and we get an upturn into the new year, then the vibe I get is that they're comfortable with 5.30. Now, I could be completely wrong, but it's just a case of wait and see."

At today's AGM, farmers would vote on a resolution from Marlborough supplier Murray Beach who has called on Fonterra to put on hold all overseas investment spending and New Zealand development projects until the payout rises to a minimum of $7 per kilo of milk solids.

Fonterra and the Shareholders' Council oppose the resolution.