Fonterra slashes forecast milk price, again
Fonterra has slashed another 50c off its milk price forecast as global milk flows shows no sign of easing.
Export data for the cooperative in December confirms the new record for a single month's volume, with more than 300,000 MT shipped to its global markets.
December's volume was about 10% higher than Fonterra's previous record month in December 2014.
Fonterra managing director for global ingredients, Kelvin Wickham says the new record reflected the ongoing successful performance of Fonterra's direct-to-customer ingredients, consumer and foodservice sales despite the tough global market environment.
"This is an excellent achievement by our sales and logistics teams and it is gratifying to finish 2015 on a high with this record export volume," says Wickham.
"We have seen unprecedented global volatility due to geopolitical events over the past year. The dairy market has been a tough environment globally, so we are pleased to achieve record export volumes despite the challenges."
Wickham says the new benchmark would be difficult to surpass as reduced milk volumes began to impact on the cooperative's production levels.
Fonterra is forecasting a year-on-year reduction of milk volumes by at least 6% this season as farmers responded to the low milk price environment and dry conditions impacted parts of New Zealand.
Since August 2015, Fonterra has reduced the amount of whole milk powder it expects to offer on the GlobalDairyTrade (GDT) platform over the next 12 months by 146,000 metric tonnes in response to a change in product mix away from base milk powders and continued successful contracting and demand through other sales channels.
"An increased portion of product is being sold through bilateral customer agreements for a premium on prices achieved on GDT. Ingredients inventory levels for the first quarter were in line with the same period last year," says Wickham.
