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Fonterra stays at $4.25 farmgate milk price

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Staff Writer | August 1, 2016
Fonterra Co-operative Group forecast farmgate milk price has been maintained at $4.25 per kilogram of milksolids (kgMS), making the total payout available to farmers in the 2016/17 season $4.75 to $4.85.
Fonterra
Dairy   Another financially challenging season
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Fonterra Co-operative Group announced a forecast earnings per share range for the 2017 financial year of 50 to 60 cents.

Chairman John Wilson said the solid forecast earnings per share range reflects performance improvements across the business and would be welcomed by farmers.

However, with the farmgate milk price forecast remaining at $4.25 per kgMS, it is another financially challenging season for farmers.

“The Co-operative is aware of how tough the situation on farm remains. We are focused on delivering as much cash as possible to our farmers by bringing payments forward while maintaining a strong balance sheet.

“This forecast is our best estimate at this early stage of the season. We will continue to update our farmers as we move through the season.”

Wilson said the $4.25 Farmgate Milk Price reflects the continuing global uncertainty and the high NZD/USD exchange rate which continues to impact the competiveness of New Zealand dairy exports.

“The recent weakening of the Euro, combined with the continued strength of the New Zealand dollar, has meant a price advantage for European export dairy products.”

“We expect global milk supply and demand to come into balance over the course of this season. Farmers globally are producing less milk in response to lower prices and we are forecasting a three per cent reduction in our New Zealand milk collection for this season.”

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