Fonterra farmers will not receive a payment this July after it said it would be rebalancing its payments to reflect higher prices paid early in the season, when prices were more buoyant.
The Fonterra system of milk payments differs from the Irish system in that the co-op forecasts the milk price for the season.
It then pays out a percentage of that price on a monthly basis and pays the balance in July when both the cows and cashflow are dry. However, this year, there was a higher forecast and subsequent payout early in the season, which has left no balance for July payout.
Fonterra milk price forecast for the 2014/15 season published in May 2014 was NZ $7/kg milk solids (32 c/l). Due tothe fall in demand and price of dairy commodities worldwide, the co-op revised that forecast down four times since then to NZ $4.50/kg milk solids (20.50 c/l) today.
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New Zealand’s Reserve Bank said this week that there would be more dairy farm foreclosures if product prices remained weak. The country’s Central Bank estimated that about 30% of dairy debt is concentrated among the most indebted 10% of farms.
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Title: No July milk cheque for Fonterra suppliers
Fonterra farmers will not receive a payment this July after it said it would be rebalancing its payments to reflect higher prices paid early in the season, when prices were more buoyant.
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The Fonterra system of milk payments differs from the Irish system in that the co-op forecasts the milk price for the season.
It then pays out a percentage of that price on a monthly basis and pays the balance in July when both the cows and cashflow are dry. However, this year, there was a higher forecast and subsequent payout early in the season, which has left no balance for July payout.
Fonterra milk price forecast for the 2014/15 season published in May 2014 was NZ $7/kg milk solids (32 c/l). Due tothe fall in demand and price of dairy commodities worldwide, the co-op revised that forecast down four times since then to NZ $4.50/kg milk solids (20.50 c/l) today.
New Zealand’s Reserve Bank said this week that there would be more dairy farm foreclosures if product prices remained weak. The country’s Central Bank estimated that about 30% of dairy debt is concentrated among the most indebted 10% of farms.
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