Fonterra Co-operative Group shareholders used their annual meeting in Palmerston North to raise concerns over the reduced 2015 milk payout, the dairy giant's forecasting and the way the milk price is set.
The forecast milk price it pays farmers was slashed in September from $6 per kilogram of milk solids to $5.30/kgMS plus an additional dividend payment of between 25c to 35c per kg of milk solids. It comes on the back of a record $8.50 total payout last season.
Shareholders yesterday expressed concern this season's payout could go below the $5 mark given the continuing volatility in world markets.
Dairy prices through the GlobalDairyTrade auction have stabilised recently but chief executive Theo Spierings said they were still only stable. The volatility made forecasting difficult, particularly when the first indication had to be made in May the year before the actual payout was made, he said.
Chairman John Wilson said the forecast would be updated in December but in the meantime he urged farmers to be cautious about their spending during the current season because he couldn't see any upside for a while yet. Wilson pointed to a recent Rabobank report that predicted there would be no upward movement in international dairy prices until the second half of 2015.