Ag 28 february, 2014

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Property

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Fonterra farmers can look to safeguard their businesses after the company forecast a record milk price. The record 2013/14 forecast Farmgate Milk Price was for $8.65 per kg/milk solids. It was an increase of 35 cents per kg/MS to the Farmgate Milk Price, and 25 cents per kg/ MS increase in the advance rate schedule of payments for farmers. “This means quite a bit of dosh going round again. This comes on top of a very big payout already, so this will give a lot of farmers a lot of good choices,” said Federated Farmers dairy chairman Willy Leferink. “Farmers will be very happy with this, it gives them a lot of opportunity to safeguard their businesses for future payout drops. I hope they use it to reduce debt.”

Mr Leferink said any increase would eventually filter back into the community. “They say that for every $1 payout lift it’s about $300 for an average punter, so this 35 cent increase will mean that every New Zealander will have $100 more in his wallet long term.” The milk price would be confirmed at the September board meeting. Fonterra Shareholders’ chairman Ian Brown said the forecast price was great news for Fonterra’s 10,500 farmers. “Fonterra farmers should feel really positive about today’s record announcement. “The forecast payout and advance rate will provide our farmers with added flexibility and enable them to move forward with continued confidence. “Given the volatility of the market, I urge farmers to continue to show prudence in their financial planning.”

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