Taranaki dairy farmers have received a confidence boost from Fonterra's announcement yesterday of a 25 cent lift in this season's payout.
They're also thrilled at the 40c lift to $4.25 in the dairy giant's January advance payment - effectively a backpay for the season to date, which for most farmers represents half their production.
Fonterra's new forecast is $5.50 for its farmgate milk price, while the forecast net profit of 40-50 cents per share remains unchanged.
Fonterra chairman Henry van der Heyden said the 40c lift in the advance rate would put more money in farmers' bank accounts next month and would help their cashflows.
Hawera sharemilkers Bryce and Amanda Savage, who will take possession of their new farm at Pukengahu in Central Taranaki at the start of next season, were pleased with the revised payout and the improved advance.
"That's got to be fabulous," Mrs Savage said. "It will make a huge difference to our cashflow."
Fonterra director David MacLeod agreed the increase in the advance would ease farmers' cashflow.
"There are farmers out there who are a little stressed financially and they'll welcome this increase."
Parininihi ki Waitotara chief executive officer Dion Tuuta said the advance would take a lot of pressure off farmers "who are doing it a bit hard. It'll give confidence back to farmers."
The rise in payout would generate an extra $450,000 for the incorporation which, as Taranaki's largest supplier to Fonterra, produced more than 2.5 million kilograms of milksolids last season.
"Any improvement is always welcome," he said.
PKW chairperson Hinerangi Raumati welcomed the timing of the announcement just before Christmas.
Taranaki Federated Farmers dairy chairman Derek Gibson said it was good news for farmers.
"The lift in the advance rate is good for tight cashflows and the revised payout will give farmers confidence Fonterra can maintain it at that level."
Chief executive Theo Spierings said Fonterra's strong balance sheet meant the co-operative could lift payments to farmers over the next few months without significant risk to its financial stability.
- Taranaki Daily News
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