Fonterra further cuts 2022/23 season price outlook
Softening demand cited as cause
3 April 2023
1 minute read
By: New Zealand's Fonterra Co-operative Group on Monday further trimmed its farmgate milk price range forecast for the 2022/23 season for the fourth time, reflecting softer short-term demand for its products, reported Reuters.
The world's biggest dairy exporter now expects to pay farmers for milk supply between NZ$8.00 and NZ$8.60 per kilogram of milk solid (kgMS), compared with an earlier estimate of NZ$8.20 to NZ$8.80 per kgMS.
Chief Executive Officer Miles Hurrell said demand for whole milk powder from top market China has not yet returned to expected levels and prices have not lifted to the levels previously expected.
"Prices have not increased to the levels required to sustain a higher forecast Farmgate Milk Price for this season," he added.
The company, which controls almost a third of global dairy trade and in March reported a 50% surge in first-half profit, kept its 2023 full-year earnings forecast intact on account of a strong balance sheet.
