Latest on Dairy Payout

The latest Global Dairy Trade auction on 1st May has seen a 1.1% fall in the Global Dairy price, but still sitting at a healthy US$3465/tonne average price. In late March Fonterra  adjusted the milk price forecast down from $6.75 to $6.55, and at the same time signalled that dividends would be slashed by about half.

Earlier in the season we were looking at a total farmgate return of $7.20-7.30, now that looks like $6.80-6.90/kg milksolids

The graph below here tracks Payout (milk price +  share dividend) since 2000

DOUBLE WHAMMY!

With the drop in cash dividend signalled it hasn’t taken long for the Fonterra share price to react. In mid-March shares were trading around $6.00 each. By 2nd May that has declined to around $5.74. So a shareholder with 130,000 shares has seen their income forecast slashed by 30 cents/kg – around $39,000 – PLUS a loss of equity on shares of 25 cents, another $32,500.

payout history to 2018F

 

fonterra share graph

 

 

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About Robert Dabb

Mobile 027 255 3992
Office 06 323 3363
Home 06 353 0298
Email: robertd@ruralandlifestylesales.com

Robert has been involved in the rural sector his whole working life. This includes as a Farm Consultant, specialising in dairy and a Regional Manager for Fonterra Co-operative Group from 2000 through to 2006 and has been in real estate since then. He holds a Bachelor of Agricultural Science degree from Massey University. With a wide network of contacts across rural industry, he is well positioned to professionally profile rural properties.