Milk price system and profit appropriation 2014 – 2016
The annual milk price that FrieslandCampina pays the member dairy farmers as of 2014 comprises
- the guaranteed price,
- the special supplements,
- the meadow milk premium,
- the performance premium (together: the cash price) and
- the distribution of member bonds.
The price paid for milk is based on the value of the supplied kilograms of protein, fat and lactose in the ratio 10:5:1.
The FrieslandCampina performance premium comprises
- the milk price, plus
- the interest on member bonds and
- the addition to the Company’s retained earnings.
The amount of the retained earnings and the performance premium is dependent on FrieslandCampina’s profit. Of the net profit of Royal FrieslandCampina N.V., based on the guaranteed price and after deduction of the recompense on member bonds and the profit attributable to minority interests, in the period 2014 – 2016
- 45 percent will be added to the Company’s equity (previously 50 percent),
- 35 percent will be paid out to the member dairy farmers as performance premium (previously 30 percent) and
- 20 percent will be paid out to the member dairy framers in the form of fixed member bonds.
The pay-out of fixed member bonds is calculated on the basis of the value of the milk supplied during the financial year.
Interim pay-out in September
In September of each year an interim pay-out, based on the Company’s results for the first half of the year and the quantity of milk supplied, may be paid out. The interim pay-out amounts to 75 percent of the pro forma performance premium over the first half of the year. The final settlement is paid out in April/May of the following year on the basis of the Company’s annual results and the total quantity of milk supplied.