Tatua Co-operative Dairy has paid $8.10/kg of milk solids to its 110 supply farms for the 2017-18 season, $1 more than last year and $1.41 more than Fonterra.
Operating revenue was a record $357 million, up from $333m the previous season, and earnings before interest and tax were $127m ($114m).
Chief executive Brendhan Greaney said the co-op’s Tatuanui, Waikato, plant took in 14.7m kilograms of milk solids from shareholders, down slightly from the 15m of the previous season.
Earnings were, therefore, $8.62/kg milksolids ($7.60) and the directors had decided to retain 52c/kg for re-investment in the company.
The payout to farmer-shareholders was the second-highest in Tatua’s history behind the $9 paid in 2013-14.
Greaney said the differential over the benchmark industry payout has widened in recent years as Tatua invested in more value-add processing.
The revenue from value-add products was up 23% last season, showing Tatua can both pay a high milk price and make good margins.
In the past eight years, Tatua has retained nearly $5/kg MS in total for building its value-add processing capacity, compared with only 70c/kg by Fonterra.
Canadian dairy giant Saputo has also lifted its farmgate milk price for its southern suppliers with the step-up to be paid next month. Click here to read more.
Article sourced from https://farmersweekly.co.nz/#