Thursday, 15 October 2020 10:01

Fonterra lifts forecast milk price

Written by  Staff Reporters
Fonterra CEO Miles Hurrell. Fonterra CEO Miles Hurrell.

Fonterra has increased the mid-point of its forecast farmgate milk price for 2020/21.

The mid-point has increased to $6.80 per kgMS, up from $6.40 per kgMS, while retaining its current +/-50c per kgMS range.

Fonterra CEO Miles Hurrell says the stronger 2020/21 milk price forecast is largely being driven by improved demand in China.

“Despite the initial impact of COVID-19, we have seen demand for dairy in China recover quickly. In particular, demand for whole milk powder, which is a big driver of milk price, has been stronger than expected.

“While it is still early in the season, dairy prices have improved from the levels we saw on GDT through the first wave of COVID-19 and demand for milk powders has proved resilient.

“We have seen this demand reflected in GDT auctions, with prices trending upwards in recent events and this is supporting our decision to lift the range and its mid-point, which farmers are paid off.”

Hurrell says one of the co-op’s priorities is to have a competitive milk price, as this not only supports its farmers, it supports local communities as well.

“At a $6.80 milk price, more than $10 billion would flow into regional New Zealand.”

Commenting on the supply and demand picture, Hurrell says there are a number of factors the co-op is keeping a close eye on, which is why it’s retaining a wide forecast range of $6.30 - $7.30 per kgMS.

“It is still relatively early in the season and a lot can change. For example, we could experience volatility with exchange rates, milk supply from the EU and US is increasing and there continues to be uncertainty around how a potential risk from further waves of COVID-19 and a global economic slowdown could impact demand.

“With increasing demand and supply, we see the dairy outlook as more balanced, but given there are still a number of risks, we are still recommending our farmers be cautious with their decision making.”

More like this

Featured

Merlo goes greener

Obviously not wishing to get left behind by some of its competitors, Italian manufacturer Merlo is planning to add to its green-liveried telehandler range- with another set of green credentials in the shape of an all-new, all-electric battery-powered Merlo e-Worker model.

 

Growing a family legacy

What started with planting some acacia trees 25 years ago has become a multi-generational passion for the Hunt family in Te Awamutu.

Moves to improve winter grazing requirements

DairyNZ says it supports recommendations to the Government from an advisory group looking to improve winter grazing rules for farmers and achieve better environmental outcomes.

National

Expat workers ready for NZ

Dairy industry recruitment company Rural People Limited is seeing a huge increase in overseas interest to fill New Zealand farming…

Machinery & Products

Kubota ROPS tractors here

Kubota New Zealand product specialist Shaun Monteith says Rollover Protective Structure (ROPS) tractors make up 30% of all tractors in…

» The RNG Weather Report

» Latest Print Issues Online

Milking It

Dung paint

India now has its own cow dung paint, a world-first. 

Fresh for 60 days

A Queensland-based company is set to release its own production of milk this year that stays fresh for at least…

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter