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.
This morning's GlobalDairyTrade auction saw the GDT price index down 7.9%, its third consecutive drop.
Worryingly, milk powder prices tumbled; whole milk powder was down 11% to US$2148/tone and skim milk powder down 8% to US$1851/tonne.
Fonterra says whole milk powder prices should stay around the US$3000/tonne to mark to justify the current forecast payout for the season; the co-op is forecasting a milk payout of $4.60/kgMS.
This week it increased its forecast earnings per share range for the current financial year to 45-55 cents, a lift of 5c.
Fonterra chairman John Wilson told journalists that he expects global dairy prices to firm in the first half of next year.
Key Results of this morning's GDT event;
AMF index down 5.9%, average price US$3,430/MT
Butter index up 5.6%, average price US$2,709/MT
BMP index down 1.0%, average price US$1,825/MT
Ched index down 5.0%, average price US$2,874/MT
LAC index down 2.0%, average price US$503/MT
RenCas index down 4.4%, average price US$5,250/MT
SMP index down 8.1%, average price US$1,851/MT
WMP index down 11.0%, average price US$2,148/MT
