Fonterra cuts milk price outlook for 2023/24

The New Zealand company said demand is low
calendar icon 4 August 2023
clock icon 1 minute read

New Zealand's Fonterra Co-Operative Group trimmed its farmgate milk price range forecast for the 2023/24 season on Friday, citing  lower import demand for whole milk powder from Greater China, reported Reuters.

The dairy company now expects to pay farmers between NZ$6.25 ($3.80) and NZ$7.75 per kilogram of milk solid (kgMS) for the 2023-24 season.

The new range compares to an initial forecast of NZ$7.25 to NZ$8.75 per kgMS, which the company announced in May, banking on expectations that China's import demand for whole milk powder would lift over the medium-term.

The reduced range reflects a current surplus of fresh milk in China that has resulted in higher local production of whole milk powder, and reduced near-term import requirements, according to CEO Miles Hurrell.

"The medium- to long-term outlook for dairy, in particular New Zealand dairy, looks positive with milk production from key exporting regions flat compared to last year," Hurrell added.

($1 = 1.6458 New Zealand dollars)

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