Fonterra's board of directors announced on May 29 an opening Farmgate milk price forecast of NZD7.00 (US$5.65) per kilogramme of milk solids (KgMS) for the 2013/14 season, including an NZD5.00 (US$4.03) advance.

Fonterra shareholders' council chairman Ian Brown said, "Having a strong forecast milk price and advance puts farmers in a healthier position and provides them greater flexibility in running their farms. It will help to relieve some of the pressure many have faced as a result of the drought, but as we operate in a volatile market I urge farmers to be prudent in their financial planning for next season."

The board of co-operative also confirmed it would be holding its current 2012/13 season forecast pay-out of NZD6.12 (US$4.93) for a fully shared-up farmer comprising a Farmgate milk price of NZD5.80 (US$4.68) per kgMS, and a forecast dividend of NZD0.32 (US$0.26) per share.

"Commodity prices were low for a large part of the financial year but it is really encouraging to see the milk price improving, and this will help farmers going forward," Brown added.

The Fonterra shareholders' council represents the interests of Fonterra farmers to the board of the co-operative and plays an active role in monitoring and assessing the governance and performance of Fonterra.  There are 35 councilors who are all shareholders elected by their fellow farmers in wards across New Zealand.