KEY POINTS:
Fonterra is warning farmers it is increasingly likely the forecast dairy payout will be cut further.
The world's largest dairy exporter, with annual revenues of about $17 billion, said today it would be reviewing its forecast payout for the 2008/09 season during the next month.
An announcement of any change from $6/kg milksolids would be made following the company's next board meeting on January 27.
Fonterra chairman Henry van der Heyden said farmers needed to be cautious in their planning in the current environment.
Continuing decline in international commodity prices, along with the worsening effects of the global financial crisis, including fluctuations in the New Zealand dollar, meant an increasing likelihood of a reduction in the forecast payout, he said.
"There's no question, right now, that there are downside pressures on payout."
The $6 forecast made by Fonterra in November was 14 per cent lower than its original estimate of $7, which had already been cut to $6.60 in September.
Last season, Fonterra gave farmers their highest payout payment in 43 years, in inflation-adjusted terms, paying a record $7.90/kg.
Just before Christmas rural information provider NZX Agrifax predicted a dairy payout of $5.15/kg this season, with Fonterra making up about 95 per cent of the payout prediction.
- NZPA
