Tiny dairy company gives farmers top payout

The tiny Morrinsville-based Tatua Cooperative Dairy Company Ltd yesterday promised its 112 farmers the industry's biggest payout -- $8.00/kg milksolids, beating the neighbouring giant cooperative Fonterra hands down.

Tatua's farmers had to battle through the one-in-100 year drought last summer and autumn -- a problem which did not affect all of Fonterra's 10,000 suppliers -- to beat the Fonterra payout of $7.90/kg.

The payout for the year to July nearly doubled last season's $4.10/kg milksolids.

Tatua generated record revenues of $185.6 million for the 14 months to July 31, and its earnings before payout and taxation were $93.8 million, equivalent to $8.62/kg.

The company said it was retaining tax-paid earnings of 37c/kg to re-invest.

The financial red-letter day comes just as the company is struggling with not only the discovery that some of its high-value lactoferrin protein powder has 4 parts per million melamine contamination, but that the cause may be its own proprietary manufacturing process.

A satellite lactoferrin plant at Westland Milk Products in Hokitika was today also revealed as having low levels of melamine contamination, and food safety officials said they were looking at the possibility that the contamination is being introduced by the manufacturing process.
Investigators are understood to be waiting for results from testing of samples from a third plant using the Tatua process, at Tatura Milk Industries in Victoria, Australia which were sent to New Zealand a week ago.

Tatua chief executive Paul McGilvary said in a statement that the company's cashflows were strong and its debt to debt plus equity ratio had been reduced to 29 percent, compared with 35 percent in 2007 and 44 percent in 2006.