increase font size
Fonterra has raised its milk price to $8.40-$9/kgMS.
Fonterra farmers have received some good news this morning: a higher forecast milk price for this season.
The co-operative has lifted its 2021-22 forecast farmgate milk price range to $8.40 - $9.00/kgMS, up from $7.90 - $8.90/kgMS.
The midpoint of the range, which farmers are paid off goes up 30c to $8.70/kgMS.
However, the higher milk price is eroding profits from the co-op’s value added business.
Fonterra has revised its earnings guidance to 25-35c/share from 25-40c/share.
Fonterra chief executive Miles Hurrell says the lift in forecast milk Price range is good news and is an important boost to New Zealand communities.
With a midpoint of $8.70/kgMS, it would contribute more than $13.2 billion to the New Zealand economy.
“It’s the result of consistent strong demand for dairy at a time of constrained global supply,” says Hurrell.
“We’ve seen the impact of a number of events play out this first quarter. That includes the high price of feed in the US which has seen milk production growth stall and a lower-than-expected supply picture in Europe.”
Fonterra’s New Zealand milk supply is down around 3% on this time last season.
“While we expect that milk supply will be less than last season’s 1,539 million kgMS, the improving weather conditions and forecast milk collections for the balance of this season that are generally on par with last season support our current season forecast of 1,525 million kgMS,” says Hurrell.
“While we’ve seen demand soften slightly in China, global demand remains strong, and we think that will remain the case for the short to medium term.
“A higher forecast Farmgate Milk Price at this level can put pressure on our margins and therefore our earnings, which is why we’ve reduced the top end of our earnings guidance.”
OPINION: There is zero chance that someone who joined Fonterra as a lobbyist, then served as a general manager of Fonterra's nutrient management programme, and sat on the board of Export NZ, a division of lobbyist group Business New Zealand, doesn't understand that local butter (and milk and cheese) prices are set by the international commodity price.
Kiwis love their butter, and that's great because New Zealand produces some of the best butter in the world. But when the price of butter goes up, it's tough for some, particularly when many other grocery staples have also gone up and the heat goes on co-operative Fonterra, the country's main butter maker. Here the co-op explains why butter prices are so high right now.
An A$2 billion bid for Fonterra's Oceania business would be great news, according to Forsyth Barr senior analyst, equities, Matt Montgomerie.
The world's largest dairy company may be in pole position to acquire Fonterra's Australian assets.
Over 85% of Fonterra farmer suppliers will be eligible for customer funding up to $1,500 for solutions designed to drive on-farm efficiency gains and reduce emissions intensity.
Fresh produce grower and exporter T&G Global has overturned last year’s dismal performance by reporting a half year net profit of $1.7 million.
One of New Zealand’s largest fertiliser plants could be forced to shut down for four months as uncertainty looms over gas supply.
Federated Farmers North Canterbury president Bex Green says two public meetings held this week should have made it loud and clear that rural families and businesses are concerned about proposed staffing changes at NZ Police.
The Environmental Protection Authority (EPA) is consulting on a proposal to ban weedkillers containing chlorthal-dimethyl (DCPA).
August 6 marks Farm Worker Appreciation Day, a moment to recognise the dedication and hard mahi of dairy farm workers across Aotearoa - and DairyNZ is taking the opportunity to celebrate the skilled teams working on its two research farms.
OPINION: The Government has been seeking industry feedback on its proposed amendments to a range of Resource Management Act (RMA) national direction instruments.
OPINION: Your old mate's ear has been chewed off recently by farmers voicing their displeasure with the National Party, particularly…
OPINION: Your old mate hears that at a recent China Business Summit, PM Christopher Luxon delivered a none-too-subtle "could try…
