26 Nov 2014

Westland lowers forecast milk payout

3:44 pm on 26 November 2014

Westland Milk Products has trimmed its forecast milk payout, as international dairy prices continue to fall.

New Zealand's second biggest dairy co-operative has knocked 40 cents per kilo of milk solids off the price, reducing it to a range of $5 to $5.40 a kilo and putting it in the same territory as Fonterra's current farm gate milk price of $5.30.

However, Fonterra is due to review its forecast next month and is widely expected to lower it also because of the on-going pressure on international dairy prices.

Westland said it lowered its forecast due to a continuing global oversupply of dairy products and the impact of a relatively high New Zealand dollar on returns.

In line with that, it has also reduced advance payments to its farmer suppliers, which means less cash in hand for them during the season.

Westland's 434 suppliers are still smarting over the size of last season's payout, which at $7.57 a kilo was well below what other companies paid in a record year.

Get the RNZ app

for ad-free news and current affairs