Dairying is an important industry on the Coast, and the success of its milk processor Westland Milk Products is a key to the areas prosperity.
After a disastrous year in 2008/09 when there payout lagged behind their competitors after problems with currency, they are back with an excellent $6.45/kgms payment.
However they have cashed in on Fonterra's milk via the raw milk regulations, and with this system up for review they may not be able to rely on this in the future.
Dairy processor Westland Milk Products is forecasting solid returns in the new financial year after a record milk peak collection day and second highest payout in its history. Chief executive Rod Quin told an upbeat annual meeting of the farmer-owned cooperative today that Westland predicts milk prices will hold above $6 kg/milk solids into the next season, with a cautionary tag about market volatility.
"We are confident that ongoing operational improvements, continued international demand for dairy products and appropriately managed commodity prices and exchange rates will provide Westland with solid returns into the coming financial year. "All sentiment in the market is pointing towards a period of relative stability with payouts in the next three to five years expected to exceed $6," he says. Westland's milk payout for 2009-2010 was $6.45, up 41 per cent on the previous year's $4.58.
The company today announced a record peak milk collection of 2.77 million on November 12. Total milk processed at the Hokitika plant increased 4.8 per cent to 502m litres in 2009-2010 due to increased supply from West Coast farmers and the company's use of regulated milk from Fonterra. This season Westland has processed average 180,000 litres a day of regulated milk, transported by rail from Rolleston in Christchurch to Hokitika daily.
The Government will next year review raw milk regulations which allow companies with their own milk supply like Westland access to regulated milk, which domestic market processing dominator Fonterra is currently obliged to sell to NZ competitors each year.
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