Westland Milk Products expects to pay a higher price at the farmgate in the 2018 season following what it says has been "10 months of analysis and systems change" under new management.
The country's second-biggest dairy cooperative has been cutting staff numbers in an effort to trim its wage bill as part of a broader restructuring to run the milk processor more efficiently after a high cost structure was seen as weighing on the 2016 farmgate payout.
It is forecasting a net payout range, after retentions, of between $6.40 and $6.80 per kilogram of milk solids for the current season. Farmer shareholders received an average payout of $3.88/kgMS in the 2016 year, while in February, the milk processor was forecasting a payout of $5.30-to-$5.70/kgMS for 2017.
Pete Morrison, who was first elected to the board in 2015 and has been a shareholder since the cooperative's creation as an independent company in 2011, was named its new chair in March, while Toni Brendish became chief executive in July 2016.
Brendish said a focus on improving organisational efficiency had driven the company's revival, and it has saved close to $70 million in the past 10 months. The company's size and facilities give it the capability to be more flexible, she said, as it can segregate its processing systems to offer customers higher-margin specialty products.
