The new forecast milk price coupled with dividend of approximately $0.5 cents per share will almost bring milk price to farmers cost of production.
John Wilson, Chairman of Fonterra said “current global milk prices remain at unrealistically low levels, but have started to improve as global demand and supply continue to rebalance.”
He also noted that milk production in New Zealand was 4% lower than last year and production in the European Union was falling.
However, Fonterra cautioned that the dairy market would remain very volatile and the forecast would continue to be updated.
Arla
Meanwhile, the Danish-based co-op Arla, which collects milk in the UK, Germany, Sweden, Belgium and Luxemburg, has announced it would raise its price by 1.25c/kg in September.
This will bring its UK price to 20.05p/l (23.5c/l at the current exchange rate).