Fonterra shaves 50c off forecast milk price
Fonterra has dropped its forecast milk price mid-point by 50c as a surge in global milk production is putting downward pressure on commodity prices.
The co-operative increased its 2023/24 season forecast farmgate milk price, with the midpoint lifting to $7.80/kgMS, up from $7.50/kgMS.
The forecast range for the season increases to $7.30-$8.30/kgMS, up from $7-$8/kgMS.
Fonterra chief executive Miles Hurrell says the lift in the farmgate milk price comes off the back of five strong Global Dairy Trade events.
“Recently, we’ve seen a lift in demand, primarily from the Middle East and South East Asia, for our reference commodity products and this has been reflected in GDT prices.
“Overall GDT prices are up 10% since our last Farmgate Milk Price update in December, with whole milk powder prices up 11.5% over the same period.
“Looking ahead, the potential impact of geopolitical instability and supply chain disruption on demand from key importing regions remains uncertain.
“We can navigate these dynamics thanks to our scale and our diversification across markets, which provides us with optionality. We are also well placed to continue to get the co-op’s product to customers through our partnership with Kotahi,” says Hurrell.
Fonterra’s forecast earnings guidance for FY24 of 50-65c/share remains unchanged.
