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.
When combined with the forecast earnings per share range for the 2017 financial year of 50 to 60 cents, the total payout available to farmers in the current season is forecast to be $5.75 to $5.85/lgMS before retentions.
Chairman John Wilson says since the cooperative last reviewed its forecast milk price in August, global milk supply has continued to reduce and demand has remained stable.
“Milk production in key dairying regions globally is reducing in response to low milk prices,” he says.
“Milk production in the EU for 2016 is beginning to flatten out and our New Zealand milk collection is currently more than 3% lower than last season.
“While we have seen some improvement in GDT auction prices recently, the high NZD/USD exchange rate is offsetting some of these gains.
“There is still volatility in global dairy markets and we will continue to keep our forecast updated for our farmers over the coming months.”
