Wednesday, 03 March 2021 12:40

'Pretty extraordinary' - Fonterra on GDT results

Written by  Sudesh Kissun
Fonterra's chief executive Miles Hurrell says the latest GDT results are 'pretty extraordinary'. Fonterra's chief executive Miles Hurrell says the latest GDT results are 'pretty extraordinary'.

Fonterra’s reliable supply chain and strong demand from China and South East Asia are helping drive dairy prices up, says co-op chief executive Miles Hurrell.

In an email to farmer suppliers, Hurrell described the overnight Global Dairy Trade (GDT) auction results as “pretty extraordinary”.

The GDT price index jumped 15% compared to the previous auction, its eight consecutive price rise.

Whole milk powder prices, used by Fonterra to set its milk payout, rose a whopping 21% to US$4364/MT, a seven-year high.

Hurrell says farmers would be keen to know what the latest result means for Fonterra’s farmgate milk price.

The co-op is forecasting a milk price range of $6.90-$7.50/kgMS and earnings range of 25 to 35c/share.

“We are now assessing the situation, running the numbers on our forecast farmgate milk price and talking to our sales teams on the ground in our markets to understand further what they are seeing, regarding future demand,” he says.

“While GDT results are one key input to the farmgate milk price, there are many other factors we need to consider – including, how far we are through the season, our sales book, foreign exchange and any ongoing impacts from COVID-19.”

Hurrell says an increase in dairy prices was expected, as reflected by the NZX Whole Milk Powder futures contract yesterday being at $3,790/MT or a 5.7% increase on the 17 February GDT event.

“However, a lift of 21% was not anticipated,” he says.

“We’ve continued to see strong demand for dairy from China and South East Asia, and participation was high last night.

“The relative reliability of our supply chain versus that of others means buyers trust we will be able to get our product to them and that’s also helping drive further demand for our products.”

More like this

A great outcome - Hurrell

Fonterra chief executive Miles Hurrell says the sale of the co-op’s consumer and associated businesses to Lactalis represents a great outcome for the co-op.

Featured

Hort industry dishes out awards

Research and healthcare initiatives, leadership and dedication to the sector have been recognised in the 2025 Horticulture Industry Awards.

Manuka honey trader posts sour results

Manuka honey trader Comvita slumped to a $104 million net loss last financial year, reflecting prolonged market disruption, oversupply and pricing volatility.

Poultry industry, Govt sign landmark biosecurity deal

The Government has struck a deal with New Zealand's poultry industry, agreeing how they will jointly prepare for and respond to exotic poultry diseases, including any possible outbreak of high pathogenicity avian influenza (HPAI).

National

Machinery & Products

» Latest Print Issues Online

Milking It

Dreams aren't plans

OPINION: Milking It reckons if you're National, looking at recent polls, the dream scenario is that the elusive economic recovery…

Fatberg

OPINION: Sydney has a $12 million milk disposal problem.

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter