Dairy farmers appear unlikely to net a financial windfall by changing dairy companies, as Fonterra's forecast milk price has set a benchmark.
Most of the country's five other export dairy companies have based this and next season's milk price on that paid by Fonterra, and have praised the dairy giant for being cautious and acknowledging the market uncertainty.
Westland Milk Products chief executive Rod Quin said his 380 West Coast shareholders would receive $4.50 kg/ms this season, well down on Fonterra's forecast of $5.20 kg/ms, due to exposure to unfavourable exchange-rate movements, short-dated contracts and product mix.
Cheese prices have held up better than prices for other dairy products, helping Fonterra, but Westland does not manufacture cheese.
Westland was more bullish about the coming season, forecasting a milk price of $4.50 to $4.90, predicated on a United States-New Zealand dollar exchange rate of US60c, and optimistic of improved returns for high valued butter and milkpowder and a strong performance by its four-year-old protein plant.
Fonterra has forecast $4.55 kg/ms for next season.
Open Country Dairy chief executive Mark Fankhauser would not disclose his company's milk price for this season until he has told shareholders, but said it would be competitive and within the range paid by Fonterra.
He was also setting next season's milk price.
An appreciating exchange rate was driving price volatility, with a 1c change in the NZ-US exchange rate equating to a 10c kg/ms shift in the milk price.
Given this and the uncertainty of the impact of US dairy export subsidies, Mr Fankhauser said Fonterra was right to be cautious with its forecast.
"I think Fonterra has taken a responsible position and reflects where I reckon the market should be, given where the dollar is at."
The lower forecasts had brought home to farmers what dairy exporters have been dealing with for the past year.
When milk powder prices hit $US4500 a tonne and then dropped, he said some customers were cancelling orders and reordering at lower prices.
Mr Fankhauser said the company was opening a milk processing plant in Wanganui for next season and milk volumes next year would increase from 520 million litres to 800 million litres.
The Tatua Co-operative Dairy Company was also finalising its milk price, chairman Steve Allen said, although its financial year does not end until July 31.
"It will be pretty similar to Fonterra where we expect it to land, but there are still a couple of months to go."
Mr Allen said Tatua's strategy of selling high-value products would mitigate some of the exchange-rate volatility.
"I think Fonterra has been very prudent with what it has come out with initially," he said.
New Zealand Dairies linked its payout to Fonterra.
Chief executive Aidan Johnstone said next season's forecast milk price was based on a US59c exchange rate but the dollar was now trading at US64c.
Synlait management did not return calls.
