Red Hot off the Press - Federated Farmers Media Release 'Fonterra warning on payout not unexpected'

30 December 2008

Fonterra warning on payout not unexpected

"Fonterra’s warning of a likely revision downwards in the current milksolids forecast payout is not unexpected," says Lachlan McKenzie, Federated Farmers Dairy chairman.

“The thing critical to Federated Farmers and to supplier-shareholders is for Fonterra to be realistic with its next forecast.

“While we don’t expect Fonterra’s next revision to be as bad as some smaller companies have forecasted, dairy farmers need better certainty to undertake financial budgeting. These constant revisions are making this difficult. It’s time for Fonterra to under promise and over deliver.

“Around $12 million from on-farm incomes is cut every time a cent is shaved off the milksolids payout. This impacts the entire economy.

“While global commodities are still showing negative sentiment the medium term picture for dairy remains bright. At least the New Zealand economy is based on exporting goods the world needs, food," Mr McKenzie concluded.