New Zealand dairy co-op posts record production and profit

Sep 21, 2011, 23:20 GMT

Wellington - New Zealand's Fonterra Co-operative Group, the world's biggest exporter of dairy products, Thursday posted a record profit for fiscal 2011, pumping nearly 11 billion New Zealand dollars (9 billion US dollars) into the fragile national economy.

Chairman Sir Henry van der Heyden said the co-op would give its 10,500 farmer-shareholders payments for milk and dividends totalling 10.6 billion New Zealand dollars - 2.4 billion New Zealand dollars up on the previous year.

'As Fonterra is a co-operative that is 100 per cent-owned and controlled by New Zealand farmers, that money flows right back into the local economy as farmers reinvest in their businesses and buy more farm supplies and equipment,' he said.

Fonterra collected a record 1,346 million kilograms of milk solids in the last season, an increase of 5 per cent on 2009/10, and exported a record 2.1 million tonnes of dairy products.

It announced a record payout to farmers of 7.60 New Zealand dollars a kilogram of milk solids plus an additional 65 cents a share.

Van der Heyden said the price paid to farmers for their milk reflected the recent strength of world dairy markets, with prices for some products reaching historical highs during the year.

Revenue in the year ended July 31 rose 19 per cent to a record 19.9 billion New Zealand dollars while after tax profit was up 13 per cent to 771 million New Zealand dollars.

Chief executive Andrew Ferrier said sales of consumer products - as distinct from dairy ingredients sold to multi-national food manufacturers - hit a new record of 6.1 billion New Zealand dollars, led by growth in Asia, Africa and the Middle East.

Earnings in 'a fiercely competitive market environment' in Australia and New Zealand, however, were down 17 per cent.

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