NZ dairy giant Fonterra slashes forecast payout for farmers
21/11/2008 17:40
The New Zealand dairy industry giant Fonterra today slashed its forecast
payout to farmers for this season.
The payout for the year to May 2009 has
been cut by 60 cents to 6 NZ dollars a kilogram of milk solids.
Fonterra
cited a drop of 24 percent in international dairy commodity prices in the past
eight weeks as a contributing factor, and warned that world prices would remain
weak.
Fonterra Chairman Henry van der Heyden said declining prices across all
commodities, including dairy, have been exacerbated in recent weeks by the
global financial crisis.
He said the revised forecast payout has been brought
forward so farmers could budget accordingly. Given current conditions, demand
was unlikely to recover by mid-2009 as initially expected.
Fonterra chief
executive Andrew Ferrier said the situation has also been made worse as a
build-up of world stock levels and a rebalancing of the market is unlikely in
the short term.
Rural services and supplies companies said they expect
farmers to continue cutting their spending.
Xinhua
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