Fonterra raises milk price

30 Aug 2016

Fonterra has increased its 2016/17 forecast Farmgate Milk Price by 50 cents to $4.75 per kgMS, noting that current global milk prices remain at unrealistically low levels, but have started to improve.

Fonterra raises milk price

Fonterra has increased its 2016/17 forecast Farmgate Milk Price by 50 cents to $4.75 per kgMS.

When combined with the forecast earnings per share range for the 2017 financial year of 50 to 60 cents, the total payout available to farmers in the current season is forecast to be $5.25 to $5.35 before retentions.

Chairman John Wilson said current global milk prices remain at unrealistically low levels, but have started to improve as global demand and supply continue to rebalance.

“Milk production is reducing in most dairying regions globally in response to low milk prices and this is bringing the world’s milk supply and demand back into balance,” said Wilson. “Milk production in the EU is now in decline and our New Zealand milk collection at this early stage is around 4 per cent lower for the year to date. Prices have increased on GlobalDairyTrade but the increasing NZD/USD exchange rate continues to offset some of these gains. “We expect the dairy market to be volatile over the coming months and will continue to keep our forecast updated for our farmers as we move into the season.”

Fonterra is required to forecast its Farmgate Milk Price every quarter under the Dairy Industry Restructuring Act (DIRA).

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