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.
Last week, the co-op confirmed a final organic milk price of $12.35/kgMS for the 2024-25 season, which ended May 31 this year. Fonterra’s highest organic milk price to date was in 2023-24 which set a record of $10.92/kgMS.
Anne Douglas, group director Farm Source, says this marks a fifth straight year of organic milk price increases, reflecting an incredibly positive demand story for the high-quality milk our farmers supply every day.
“Organic dairy sales have experienced strong growth, particularly in the US. Additional tariffs on imports into the US did present us with challenges in FY25, however, these were largely able to be passed through to our customers due to the firm demand,” Douglas told Dairy News.
“Favourable market conditions saw our FY25 organic sales increase 27% year on year, while the co-op’s organic milk collections were also up 7.5% to 9.7 million kgMS.”
The co-op’s organics business has been running since 2002 and continues to grow in supply, product range and value.
Over the last 4-5 years, the programme has more than doubled in size and currently includes more than 100 farms.
Read More:
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- Fonterra organic milk price hits record $13/kgMS
- Fonterra's record forecast organic milk price
Today, the business is in a strong position, says Fonterra, as it makes the most of market conditions, including growing consumer demand as well as supply constraints globally.
Organic farmers earn a premium, and there’s also a benefit to all Fonterra farmers because around 20% of the programme’s revenue goes back to the co-op as a contribution to shared overheads and earnings.
