Fonterra keeps forecast farmgate payout at $6/kgMS
"Since November, the global market for commodity dairy products has remained relatively balanced."
Fonterra has kept its forecast farmgate payout at $6 per kilogram of milk solids, citing the rebalancing of demand and supply which led to a slump in dairy prices last year.
The company expects those prices to either stay stable or "gradually increase."
The co-operative has confirmed the forecast farmgate milk price announced in November, and combined with projected 50=60c earnings a share will deliver a total payout to farmers of $6.50-6.60 before retentions, it says.
Fonterra also raised its advance rate for February, paid in March, to $4.85/kgMS from a November projection of $4.30/kgMS.
"Since November, the global market for commodity dairy products has remained relatively balanced and we expect global prices to continue to hold or gradually increase over the back half of this season - a view shared by most global analysts," chairman John Wilson says.
"Our confidence in the global dairy market at this stage in the season, combined with the strength of our co-operative, has enabled us to increase the monthly advance rates more than we normally would at this time of year."
Dairy prices fell 3.2% at the latest GlobalDairyTrade auction this week, with prices for whole milk powder down 3.7% to US$3189 a tonne. AgriHQ trimmed its forecast payout for the 2017 season 5c to $6.33/kgMS today due to recent weakness in global dairy markets while acknowledging it's still higher than the milk processors are forecasting.
(BusinessDesk)
Paul McBeth
Thu, 23 Feb 2017
Thu, 23 Feb 2017
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Fonterra keeps forecast farmgate payout at $6/kgMS
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