World supply constraints are expected to be a bigger factor over the next year than any consumer reaction against the big dairy price rises in the past few months, says Fonterra chief executive Andrew Ferrier.
The New Zealand company forecast a 27 per cent increase in the total payout to its dairy farmer supplier-shareholders in the year to May 31, 2008.
The forecast payout is $5.53/kg MS, up from $4.35/kg MS (milk solids) for the season ending this week.
Chairman Henry van der Heyden says he is “not prepared to guess” whether this year’s
figure can rise when the final payout is decided in late July.
The entire commodity price is paid out to farmer suppliers and Fonterra’s profit is reflected in the added-value consumer brands portion of its business.
The commodity price rises have superseded the impact of the high NZ currency.
