Westland and Synlait lift forecast payouts

South Island milk processors Westland Milk and Synlait have both announced hikes in their forecast payouts to farmers for the 2018-19 season.

Westland, which has weathered several difficult years, predicts a jump in its payout from last season’s range of $6.10-6.30 per kilogram of milksolids to a range of $6.75 to $7.20 for the coming season.

Canterbury-based Synlait has matched Fonterra’s opening

2018-19 forecast of $7 per kg/MS. At the same time it has lifted its forecast base milk price for the

2017-2018 season from $6.50 kgMS to $6.65 kgMS.

Darfield farmer and Westland supplier Paul Jarman said he was encouraged by the forecast, and supported the co-operative’s strategy.

‘‘The new chief executive has made a good effort on cost control and the value-add strategy is working well. We are growing our herd to meet the demand.’’

Only a year ago more than a dozen farmers threatened to shift to Fonterra from the financially troubled co-operative, which posted a $14.5 million loss in 2016.

Last year it was back in the black to the tune of $1.5m, and was boosted by the addition to its share register of Southern Pastures, whose nine Canterbury farmers have shifted from supplying Fonterra.

The turnaround in Westland’s fortunes raises the question of whether its share price will remain at a low $1.50. A spokesman confirmed the co-op is conducting a review of its capital structure.

Chairman Pete Morrison said the price hike to farmers was possible because of improved sales, a better performance from its infant and toddler nutrition and UHT plants, and the popularity of its butter.