News Milk price
Fonterra raises milk price and dividend even further
Once again Fonterra has adjusted the milk price forecast for the current season upwards. A new record was already in the making and that has now been increased further, as has the dividend. All this is due to the financially good performance of the New Zealand dairy cooperative.
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The range of the milk price forecast is now NZ $8,40 to $9 per kilo milk solids. The midpoint is set at NZ$8,70. In October it was still $8,40. This already equaled the record of 2013, now a new record is up for grabs. The dividend for the current season is estimated at between 25 and 40 cents per share. This increases the top of the range by 5 cents.
CEO Miles Hurrell calls the increases good news for the cooperative's member dairy farmers. The current estimate allows members to distribute $13 billion this year, Hurrel expects.
Miles Hurrel
Positive market sentiment
"Although Chinese demand has slumped somewhat recently, sales opportunities on the global market are still excellent at the moment. We expect this market sentiment to remain this way for the short to medium term," Hurrel said. Regarding the impact of corona, Hurrel finds the new variants of the virus worrying. According to the CEO, it remains uncertain whether the economies of countries can absorb the blow. Times are tough for Fonterra employees, who have sometimes been working from home for more than eighteen months.
Profit on track
In the first quarter of this financial year, which ended on October 31, EBIT (gross profit) amounted to $190 million. This puts Fonterra on course to increase its profits last financial year to surpass. The increase in profit is mainly a result of the 30% price increase of whole milk powder, although costs have increased considerably this year, according to the CEO.