Fonterra farmers to get one of biggest milk price payouts yet

It's well above Fonterra's target.
It's well above Fonterra's target. Photo credit: Newshub.

Fonterra farmers are in line for one of the biggest milk price payouts in the cooperative's history.

The dairy giant has raised and increased its farmgate milk price range to be between $7.90 and $8.90-per kilogram of milk solids for the 2021/2022 season, up from between $7.25 and $8.70.

Fonterra chief executive Miles Hurrell says the higher forecast range is the result of strong demand for dairy products at a time of limited supply, especially from the Chinese market.

He says mid-point of the new range would equal the previous record set back in 2014 and would see $13 billion pumped into the rural economy.

It's well above Fonterra's target of an average milk price payout of between $6.50 and $7.50 per kilo of milk solids.