NEW ZEALAND – Fonterra’s forecast cash payout for the coming season is staying at $6.20-$6.25 in view of the strong long term dairy outlook.
A Fonterra spokesperson said dairy demand projections are positive, with commodity prices expected to strengthen in late 2014 and early 2015.
But, market volatility remains, according to chairman John Wilson, describing the decision as the ‘best judgement at this time’.
He said: "While the long-term market fundamentals remain sound, we need to recognise that the current market conditions are difficult and there remains further downside risk.
The announcement will bring a ‘huge sigh of relief’ from dairy farmers, according to Federated Farmers of New Zealand who welcomed the announcement.
Dairy chairperson Andrew Hoggard said: “The milk price hold is good news given there’s been widespread speculation about it sliding below the $6 mark, however, we’re not out of the woods yet.
“We still advise farmers to err on the side of caution by budgeting in the mid-$5 payout range.”
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