New Zealand dairy giant Fonterra has forecast a strong milk price of $6.75/kg of milk solids (MS) for its 2017/18 milking season, which roughly equates to a base price of 28.5c/litre for all suppliers. Fonterra said the healthy outlook for the year ahead is based on strong global demand, with “renewed interest” in dairy nutrition. The co-op added that dairy markets are back in balance following contractions in New Zealand and European milk supply over the last 12 months.
New Zealand dairy giant Fonterra has forecast a strong milk price of $6.75/kg of milk solids (MS) for its 2017/18 milking season, which roughly equates to a base price of 28.5c/litre for all suppliers.
Fonterra said the healthy outlook for the year ahead is based on strong global demand, with “renewed interest” in dairy nutrition. The co-op added that dairy markets are back in balance following contractions in New Zealand and European milk supply over the last 12 months.
On top of the strong milk price forecast, Fonterra is forecasting a dividend top up of between 1.9c/litre and 2.3c/litre for shared-up suppliers for the coming milking season.
The bullish forecast on milk price will be a boost to New Zealand dairy farmers, who have endured some difficult time in recent years, with milk prices falling as low as 16c/litre in 2015.
Fonterra announced its milk price forecast for the coming milking season as the farmer-owned co-op reported its financial results for 2016/17. The co-op confirmed a final milk price of $6.12/kg of MS for its 2016 milking season, which equates to just under 26c/litre. When a dividend payment of 1.7c/litre is included, shared-up Fonterra farmers received 27.5c/litre for milk supplied from July 2016 to June 2017.
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