Fonterra says total farmer payout this year likely to be $6.40/kgMS

According to NZ Hearld, Fonterra Cooperative Group has told shareholders at its annual meeting in Darfield today that the farmer payout this season will be $6.40 per kilogram of milk solids.

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The cooperative boosted its forecast farmgate milkprice for the current season to $6/kgMS last month after rising global dairy prices, adding an estimated $3.8 billion to New Zealand's economy.

It previously stated the additional dividend would be based on an earnings per share forecast of 50 to 60 cents.

Fonterra's policy is to pay out 65 to 75 per cent of adjusted net profit after tax over time and today chairman John Wilson indicated this year's dividend would be 40 cents per share once retentions are taken out.

That compares to the $4.30/kg MS paid out in the 2015/2016 season which included a farmgate milk price of $3.90 and a 40 cent dividend.