Record payout for farmers

Fonterra announced a record opening milk price payment for farmers next season underpinned by continued strong demand for dairy products and constrained global supply. The co-operative expects to pay farmers between $8.25 and $9.75 a kilogram of milk solids for the season starting next month. The $9 per kgMS mid-point beats the previous record set this time last year of $8 per kgMS. The country’s largest dairy company has raised its forecast payment four times this season as tight milk supply underpins demand for New Zealand’s biggest export commodity. Disruption in Ukraine, China and Sri Lanka has weighed on recent global auction prices, prompting Fonterra to pull back its forecast earlier this month, but it expects those impacts will be short term.