Fonterra suppliers welcome Capacity Adjustment Charge

28 March 2013

Fonterra suppliers welcome Capacity Adjustment Charge deferment

Given the stress around drought and with falling milk volumes, Federated Farmers is delighted Fonterra Cooperative Group has listened to the Federation and will defer its Capacity Adjustment Charges until 20 October 2013.

“Fonterra’s dairy farmer-suppliers are required to forecast how much milk they will deliver in a season but this drought is posing more than a few problems,” says Andrew Hoggard, Federated Farmers Dairy Vice-Chairperson.

“Federated Farmers knew milk volume forecasts were being undershot in the North Island especially. Our members raised legitimate concerns about Capacity Adjustment Charges and so we asked Fonterra to note them.

“I need to stress this sort of charge does not apply to our members in the cooperatives; Tatua and Westland Milk Products.

“For Fonterra suppliers I am pleased to say they will have deferred payment until 20 October when our cashflow improves. This is when Fonterra supplier shareholders get their final payout for the 2012/13 season and the dividend too.

“There will be many farmers breathing a sigh of relief on hearing this news. Fonterra needs to be recognised for doing this because it really is an abnormal season.

“The idea behind dairy farmers accurately forecasting milk production is to ensure the most efficient use of Fonterra’s stainless steel.

“For some farmers this season these charges could have amounted to fairly large sums. It also means money, which is already in short supply, will now be saved.

“Thankfully Fonterra has listened to Federated Farmers so their farmers can relax,” Mr Hoggard concluded.

ENDS

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