Saturday, March 30, 2024

Processors match Fonterra’s $7.14

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SMALL dairy companies ended the 2020 season with milk payouts related to Fonterra’s base payment without dividend.
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As was committed at the time of purchase, Westland Milk Products paid the Fonterra equivalent of $7.14/kg milksolids in the first financial year of its Chinese ownership by Inner Mongolia Yili Industrial Group.

The smaller sister company, Oceania Dairy in South Canterbury, paid the slightly higher $7.24/kg, plus a premium of up to 5c for low somatic cell count.

The average paid was 2c, supply and environment manager Shane Lodge said.

Westland also paid a premium of up to 5c for low somatic cell count, general manager of supply Mark Lockington said.

Final retro payments for the past season would be paid on October 20, along with the new season payment for September milk, the two Yili-owned companies said.

In the central North Island, Miraka paid a milk price of $7.14/kg to its suppliers last season, comprising $7 base price and an average 14c premium for Te Ara Miraka incentive scheme.

Among the reasons for the slightly lower payout, Miraka cited covid-19 disruption to its UHT plant, which was shut for a period, and impacts to orders for China.

On the positive side, demand was higher for its domestic products branded under Taupo Pure.

Despite the summer drought in parts of its collection zone, Miraka ended the last season with 2% higher milk intake than 2018-19 at 290 million litres, general manager of milk supply Grant Jackson said.

But the season ended strongly with some months 10% ahead and the new season had begun well, being currently 6% ahead on the same number of supply farms.

The more northerly supply farms in South Waikato calved in late-June, while the higher altitude farms in the Central Plateau calved in mid-July, which helped spread the supply to the UHT plant over winter, Jackson said.

Oceania said drier weather took the top off its 2019 spring peak inflow and into the new year, but increased production thereafter saw most of its 73 supply farms finish on or just above budget for the season.

Covid-19 caused some disruption to processing plant work patterns but did not negatively impact milk supply or Oceania’s ability to ship products to its customers.

Westland and Oceania said their current forecasts for the current season were $6.50 and that 85% of the forecast was paid to farmers during the months June to April with step-ups and retros thereafter.

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