Fonterra Co-operative Group has reduced its 2023 to 2024 season forecast Farmgate Milk Price range from $6.25 to $7.75 per kgMS, with a midpoint of $7.00 per kgMS, to $6.00 to $7.50 per kgMS with a midpoint of $6.75 per kgMS.
Fonterra CEO Miles Hurrell said the Global Dairy Trade (GDT) prices have continued to fall since it revised its Farmgate Milk Price earlier this month, requiring the Co-op to reduce its midpoint by a further 25 cents.
"GDT prices have fallen sharply since we released our opening forecast for the season in May, with the overall index down 16 percent over that period," said Hurrell.
"While our wide forecast range assumed movement in GDT prices, whole milk powder prices fell 10.9 percent in the most recent trading event requiring us to revise our position again."
Hurrell continued that the reduced demand from crucial importing regions for whole milk powder had continued to weigh on prices. While indications show that demand will start to return over the second half of the 2024 financial year, Fonterra did expect the pace of demand growth to be subdued relative to initial expectations.
In the meantime, Fonterra will continue to respond to market signals and adjust its forecast Farmgate Milk Price to ensure that the impact of current prices and currency movements is transparent.
"This is a challenging time for New Zealand's dairy farmers, and the Co-op is doing all it can to support its farmers."