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.
Its bulk ingredients – caseinates, whey protein concentrate and anhydrous milk fat – had a good year and have started the new season strongly as well. The outlook for milk fat products continues to be strong, Greaney said.
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.
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Article sourced from https://farmersweekly.co.nz/#