Inside: Milk & Food
Milk price Fonterra keeps magical course
The milk price of Fonterra has already had a stormy rally. Nevertheless, a small sprint can be made just in the nick of time and the milk price increases again. Only a less favorable exchange rate causes the gap between the milk price of Fonterra and FrieslandCampina to widen further.
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The 2016/2017 season started on a low note for the dairy farmers who supply Fonterra. After 2 disastrous years, it looked like this season was going to make up for something.
4,75
NZ dollar
However, an opening price of NZ$4,75 per kilo of Milk Solids (MS) was still not enough to make up for some of the losses of the last 2 seasons. This was also accompanied by less milk due to extremely wet spring weather.
Steadily increasing milk price
It was precisely that wet weather and the fewer liters that started to pay off during the course of the season. The milk price had the opportunity to rise from 5,25 NZ dollars, increased to 6 NZ dollars and closed the year with 6,15 NZ dollars. This is thanks to the increase that came out on Tuesday, May 23. Only in the 2013 season did the milk price turn out higher. A magical change in the milk price. The dividend remains at 0,45 to 0,55 NZ dollars per kilo of MS.
All in all, it gives dairy farmers a milk price of NZ$6,60 to NZ$6,70. Which amounts to 30,21 to 30,67 euros per 100 kilos of milk, with 4 percent fat and 3,3 percent protein. The higher milk supply in the autumn serves as an extra bonus for dairy farmers. They can generate a little more income for the company with the extra liters. In total, Fonterra expects 3 percent less milk compared to the 2015/2016 season.
6,50
NZ dollar
Confidence in the market is increasing
Confidence in the market is not only reflected in the milk price increase at the end of the season, but also by a high forecast for the 2017/2018 season. The first basic price has been set at NZ$6,50 per kilo of MS. A forecast for the dividend will be published at the beginning of August.
Positive signal for the Netherlands
In recent months, the milk prices of Fonterra and FrieslandCampina have been closer to each other. New Zealanders benefit from a lower cost price. Due to a less favorable exchange rate, milk prices will diverge further in May. FrieslandCampina's milk price is usually higher, as can be seen in the graph, meaning Fonterra's higher forecast is also good news for Dutch dairy farmers.
1NZ dollar = 0,6272 euros
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