Wednesday, 26 May 2021 09:14

Settled GDT prices lead to 5c dip in payout midpoint

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Fonterra has reduced its 2020-21 forecast farmgate milk price range midpoint by 5c.

 

Having sold most of its milk for the 2020/21 season, Fonterra says it is now in a position to narrow this season’s range - from $7.30 - $7.90/ kgMS to $7.45 - $7.65/kgMS. 

 Chief executive Hurrell says, at a mid-point of $7.55/kgMS , 2020/21 would be the second year in a row with the forecast farmgate milk price above $7/kgMS. 

 Hurrell says since March, global dairy prices have settled, somewhat.

“This is why we have revised our midpoint down 5 cents.”

He referred to the “extraordinary” March Global Dairy Trade (GDT) event, where prices jumped 15% and contributed to the increase in its forecast 2020/21 farmgate milk price range.

Back in March, the average price for whole milk powder was over US$4,350/metric tonne. In the last three GDT events, however, the average price has reduced to close to US$4,100/metric tonne. And GDT butter prices have gone from almost US$6,000 per metric tonne to below US$5,000 per metric tonne for the first time since January, Hurrell notes.

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