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Fonterra sees milk price movements more optimistic again
Dairy giant Fonterra is once again optimistic about milk price trends. Its latest forecast is that the milk price will be 50 US cents (over 25 euro cents) higher per kilo of milk solids this season than anticipated in December.
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The new midpoint price has been set at NZ$9.50 per kilogram of milk solids. Assuming that New Zealand milk contains 9% milk solids and given the current exchange rate, this equates to a milk price of €53,47 per 100 kilograms, compared to €50,65 per 100 kilograms according to the December forecast. The range within which the expected price can fluctuate has also been narrowed.
Fonterra cites the improved sentiment in the dairy commodity market as the reason for the increase, as evidenced by the latest GDT auctions. The new contracts Fonterra already has on its books also give cause for optimism, according to CEO Miles Hurrell.
Along with the new milk price forecast, Hurrell also announced that members can expect an additional dividend of 14 to 18 US cents (7 to 9 euro cents) per share from the sale of the Mainland Group to Lactalis. This is in addition to the NZ$2 merger bonus that had already been promised. However, the additional funds will only be released once the transfer of operations to Lactalis is finalized. This could take several weeks. The members have approved the final sale.
For the normal dividend for the current season, Fonterra will keep
in a range of 45 to 65 dollar cents per share (22 to 33 euro cents).