The Waikato co-operative’s initial budgets for the year were behind those of companies concentrating more on milk powder production because its product mixes of caseinate and anhydrous milk fat had lower returns early this season, while milk powder prices spiked.
But the gap had closed in recent months, with prices for cream-based products increasing, chief executive Paul McGilvary said.
“We can’t get as much advantage out of it because we’re past our peak now but we think we’ll be a little bit more competitive.”
The 2013-14 payout would also depend on milk production, as February was a dry month. But if they had extra supplements on hand Tatua farmers could get close to the 2011-12 record milk production of 13.2 million kilograms of milksolids (MS) McGilvary said.
Tatua’s 2012-13 payout was $7.40/kg MS, above Fonterra’s farmgate milk price of $5.84/kg MS.
Tatua also had a pre-tax retention of $1.17/kg MS to help finance a new $65m spray dryer approved by its board last year. It will triple capacity to produce specialised powder products such as hydrolysates, flavoured powder and specialist nutrient formula.
Building is expected to start in March next year for the dryer to be ready for the 2015-16 season, when Tatua intends to employ 31 extra staff to meet increased work volume, he said. Whey protein and casein protein products would be bought locally and from overseas customers to use in the dryer.
Tatua’s own milk supply is expected to increase about 8% next season because several suppliers have bought more land.
