Fonterra cuts milk price outlook for 2023/24
The New Zealand company said demand is low
4 August 2023
1 minute read
By: 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)
