Fonterra shareholders want accurate payout forecasts

Fonterra's Shareholders Council believes the dairy giant is well-positioned to deliver growth after posting a solid financial performance for the year, but is concerned about payout forecasts.

Chairman John Monaghan says shareholders are heartened by the payout of $4.59 per kilo of milksolids and the 16 per cent increase in the Fair Value Share.

But he says while the payout forecast moved 19 per cent during the season, the extent of the variation is of concern because farmers use forecasts to make investment decisions that help determine their production levels.

Mr Monaghan says greater accuracy will give farmers more confidence and assist the cooperative to achieve its stated milk growth targets.

The council is also concerned about the forecast payout of $3.85 for the 2005-06 season, claiming some farmers may find it difficult to maintain an acceptable on-farm return, particularly with inflationary pressure on input costs.

He says the bid to acquire Australian dairy company National Foods demonstrated the size of Fonterra's ambitions and the potential that exists for the cooperative in the global marketplace.

"There is a real appetite for expansion among farmers and they are keen to see Fonterra's unique strategic position fully leveraged for shareholders' advantage."

- NEWSTALK ZB