NZ's Fonterra cuts farmer payout forecast as prices tumble
WELLINGTON, July 29
WELLINGTON, July 29 (Reuters) - New Zealand dairy giant Fonterra Ltd cut its forecast payout to its suppliers in the new season by 14 percent because of tumbling world prices and a high exchange rate.
The world's largest dairy exporter, also New Zealand's largest company, said on Tuesday it was reducing its 2014/15 payout price to NZ$6.00 ($5.12) a kilo of milk solids from an initial forecast of NZ$7.00 made in May.
Fonterra said it was expecting a dividend from its consumer operations of 20 to NZ cents.
It said a fall in dairy prices, down 34 percent in Fonterra's global auctions since February, a fall in demand, and the high New Zealand dollar were behind the cut.
Fonterra paid out a record NZ$8.40 per kilo in the 2013/14 season on the back of surging demand from China, which drove prices higher.
($1 = 1.1727 New Zealand Dollars) (Reporting by Gyles Beckford; Editing by Stephen Coates)