Sunday, November 29, 2009
Things look up for dairy farmers
The depiction of smalltown New Zealand in the above cartoon, from the Manawatu Standard of November 12, 2009, is anachronistic. It shows what small towns looked like in the late 19th century. But in stressing the importance, in such rural towns, of dairy giant Fonterra's payout to dairy farmers, it is spot on.
The following article, from Top News of November 11, 2009, provides background information:
As confirmed by Fonterra in a recent statement, the company will be increasing its payout to dairy farmers by as much as 20%. The firm also shared that the price of solid milk products would increase by around $1.10 to $5.70 per kilogram. Distributable profit will also be lowered by 15 cents, to stand at 35 cents.
It has been calculated that the increase would add nearly $110,000 into the bank account of each dairy farmer.
"The improvement in global dairy markets reinforces that dairying is a business that’s in good heart with sound long-term prospects, both for Fonterra shareholders and the broader New Zealand economy", shared Fonterra Chairman, Sir Henry van der Heyden.
Fonterra's payout to farmers is made up of two parts - payout on milk solids and distributable profits. While the former is related mostly to milk powder rates, the latter is affected by price of product such as cheese and casein.
Fonterra has shared that recent trends have renewed the company's confidence in the global dairy market.