Fonterra has increased its forecast farmgate milk price for the season by 35 cents to a record $8.65 per kg of milk solids.
The increase - along with a previously announced estimated dividend of 10c per share - brings the total forecast cash payout to $8.75.
"The increase reflects continuing strong demand for milk powders globally,'' chairman John Wilson said.
The higher forecast payout is still below the milk price suggested by using Fonterra's milk price manual but Wilson reiterated that the board had the discretion to pay a lower farmgate price if it was in the best interests of the co-operative.
The Fonterra board also approved an increase in the advance rate schedule of monthly payments to farmer shareholders. Payments from March through to June will be 25 cents per kg of milk solids higher than the previously published schedule.
"We will provide an update on business performance when we announce our interim result on 26 March," Wilson said.
- © Fairfax NZ News