News Milk price
Fonterra raises milk price for new season
New Zealand started a new season in June and that includes a new milk price. For the season, which runs from June to next May, Fonterra has increased the expected payout price compared to the forecast announced earlier.
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The New Zealand dairy cooperative increases the milk price forecast for the 2022/23 season by $0,50 to a range of $8,75 to $10,25 per kilo of milk solids. This is a record. This forecast will be adjusted several times during the season based on developments in dairy prices and market expectations. The middle of the range will ultimately be the payout price that Fonterra members will receive. The expected dividend has been provisionally set at 30 to 45 dollar cents per share.
The final milk price for the current season will be definitively determined in September, at the same time as the annual figures for the broken 2021/22 season are launched. For the time being, the forecast is $9,30 per kilo of milk solids.
Favorable market expectations
Fonterra CEO Miles Hurrel indicates that the higher expected price is in line with favorable market expectations in relation to supply and demand. The relatively strong US dollar is also beneficial for the dairy cooperative, as world trade often takes place in this currency. At the same time, Hurrel indicates that the uncertainties are large, which is why the range of the milk price is quite wide.
Fonterra also indicates that it will adjust the long-term forecasts until 2030 for the financial results and the milk price. This was announced last year, but due to the sharp rise in inflation and rising interest rates, macroeconomic developments have changed considerably.