Farmers will be disappointed with Fonterra's downwardly revised forecast dividend for the current season, especially given the low farm gate milk price, says Fonterra Shareholders' Council chairman Ian Brown. "That Fonterra has maintained the 2014/15 forecast farmgate milk price at $4.70 per kg is a positive given the volatility experienced throughout the season to date, however shareholders had an expectation that their co-operative would have delivered a higher dividend," Brown said. "Shareholders rightfully want to see the strategy provide a return on their investment, especially given the low milk price environment farmers are currently experiencing," he said.
The 25-member council represents the interests of Fonterra farmers to the Fonterra board.
Federated Farmers urged dairy farmers to keep their budgets tight.
"Farmers were hoping for some good news, but [the] announcement enforces the need to maintain their frugal mindset," said Andrew Hoggard, Federated Farmers dairy chairman. "What will be the biggest disappointment to farmers ... is Fonterra's drop in its dividend."
Industry body DairyNZ is advising farmers to focus on strong cashflow management as they look ahead to the 2015-16 season. Many would dip into the red this spring.
