Fonterra's chairman John Wilson had a good news / bad news story for farmer shareholders when he spoke to The Country's Jamie Mackay today.
First the good news. The forecast farmgate milk price is up to $6.75 for the current season and $7.00 for the 2018/19 season.
"Yeah $7 is a good number," says Wilson "which of course is good news ... many of our farmers [are still recovering] from those two tough years with the lower milk prices in 2015/16, so this is fantastic."
Now for the not-so-good news. Although the milk price of $6.75 will be welcomed by farmers, it comes at a cost, as the forecast dividend range has dropped to 15-20 cents per share.
"It's this ongoing challenge that we have with the volatility in our earnings and what we call our product mix ... [it] puts pressure onto our food services margins."
