Fonterra is required to consider its Farmgate Milk Price every quarter as a condition of the Dairy Industry Restructuring Act. The increase – along with a previously announced estimated dividend of 32 cents per share – amounts to a Forecast Cash Payout of $8.12.
Chairman John Wilson said the higher forecast farmgate milk price reflected continuing strong international prices for dairy. “Current market views support commodity prices remaining at historically high levels longer than previously forecasted. The two most recent GDT (GlobalDairyTrade) events have seen prices hold and significant volumes sold. These factors have contributed to our updated forecast,” said Wilson.
At this early stage in the season, however, Wilson said there were a number of uncertainties – and that was why there would be no change to the current advance rate announced in July. “We will provide an update on business performance when we announce our Annual Result on 25 September 2013,” concluded Wilson.