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John Wilson.
Fonterra has announced an opening forecast Farmgate Milk Price of $7/kgMS for the 2018/19 season starting June 1.
Chairman John Wilson says the strong opening milk price would be very welcome news for the cooperative’s farmers as they look ahead to the new season.
“What we are seeing is a continued positive global supply and demand picture which gives us the confidence to increase our current forecast Farmgate Milk Price into the new season.
“Demand is expected to remain strong – especially from China and for butter and AMF. We are expecting the global dairy market’s current prices, especially for fats, to continue throughout the new season.”
Fonterra is forecasting New Zealand 2018-19 milk collections to be 1,525 million kgMS, a 1.5% increase on current forecast for this season.
The co-op expects to see a lift in supply from the EU, US, Australia and Argentina, says Wilson.
“We will announce our forecast earnings per share for the 2019 financial year in July as normal. This, along with our forecast Farmgate Milk Price, comprises the total available for payout to our farmers.”
Fonterra is required under the Dairy Industry Restructuring Act to announce its forecast Milk Price at the beginning of each season, which starts on 1 June.
In a follow-up to this old mutt’s piece two issues ago about Fonterra directors getting to grips with the co-op’s financial state and loudly sharing their dismay in the Koru club, another of the Hound’s spies has passed on more news in the ‘Fonterra director watch’ category.
Fonterra says there’s an urgent need to improve return on capital invested in the co-op by farmers and unit holders.
Fonterra has taken a $126 million hit over the sale of its stake in Venezuelan consumer joint venture, Corporacion Inlaca.
Fonterra is pulling out of a European joint venture as part of its portfolio review following last year’s disastrous financial results.
Fonterra says it has returned to profitability with a net profit of $80m for the first half of the 2019 financial year.
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