Fonterra has announced a revised pay-out forecast range for the 2012/13 season of NZ$5.50 per kilogram of milk solids – an increase of 25 cents on the previous forecast.
The New Zealand-based processor and exporter is required to consider its farm gate milk price (FGMP) every quarter under the country's Dairy Industry Restructuring Act (DIRA).
“The immediate effect of this decision is that our farmers will have more money flowing into their bank accounts from late January when they are paid for the previous month, and that will help them with their cash flows,” said Fonterra chairman, Sir Henry van der Heyden.
Fonterra CEO Theo Spierings added that that the co-operative’s strong balance sheet means that it is in a position to increase payments without risking financial stability.
“Given current global conditions, our forecasting anticipates global dairy prices are likely to move higher in the first half of 2013,” said Spierings.