Fonterra Revises 2018/19 Forecast Farmgate Milk Price

Oct 11, 2018
1050 Views

Fonterra Co-operative Group Limited today revised its 2018/19 forecast Farmgate Milk Price from $6.75 per kgMS to a range of $6.25-$6.50 per kgMS and increased its forecast New Zealand milk collection volumes by 1.3 per cent to 1,550 million kgMS.

Fonterra Chief Executive, Miles Hurrell, says the change in the forecast Farmgate Milk Price was due to a stronger global milk supply relative to demand at this time.

“I know how hard it is for farmers when the forecast Farmgate Milk Price drops, but it’s important they have the most up to date picture so they can make the best decisions for their farming businesses.

“We are still seeing strong production coming from Europe, US and Argentina. While the hot weather in Europe has slowed down the region’s production growth, it is still tracking ahead of last year. US milk production is up slightly and Argentina’s is up 6.8%.

“Here in New Zealand, the season has got off to a positive start, mainly thanks to good weather and early calving in the South Island. As a result, we have increased our forecast milk collections for the year to 1,550 million kgMS – up from 1,525 million kgMS.

Mr Hurrell says that global demand is simply not matching current increases in supply.

“At recent Global Dairy Trade (GDT) events, prices for all products that make up the milk price have fallen. Demand for WMP, in particular, continues to grow in China, and it remains strong across South East Asia, but it simply isn’t matching current levels of supply.”

Talking about the new move to provide a range for the forecast Farmgate Milk Price, Mr Hurrell says it was part of the Co-op’s intention to provide the best possible signals.

“We operate in a hugely volatile global market place, so it is very difficult to pinpoint an exact forecast Farmgate Milk Price this early in the season. For example, weather conditions can change suddenly and this can have a significant impact on the global milk supply.

“As a result, we have chosen to give a range of $6.25-$6.50 per kgMS and be clear that the Advance Rate is based on $6.25 per kgMS and the final price could be outside this range as we are still early in the season and up against considerable volatility. We therefore recommend farmers budget with ongoing caution.”

The timing of today’s update is driven by available market information and is not a DIRA requirement. Fonterra is required to give a forecast for DIRA purposes by 15 December 2018.

You may be interested

Funeral Notices – Monday 22nd July
Funeral Notices
1142 views
Funeral Notices
1142 views

Funeral Notices – Monday 22nd July

Notices - Jul 22, 2019

If you would like your recently lost loved ones death / funeral notice or memoriam listed here, contact your Funeral…

Flashback: Old Local Council Election Flyers From 1980’s
Election 2019, Old Invercargill
1609 views
Election 2019, Old Invercargill
1609 views

Flashback: Old Local Council Election Flyers From 1980’s

Old Invercargill - Jul 21, 2019

With news of major redevelopment for our City Centre today we windback to the late 1980's featuring election flyers for…

Mal’s Moon Memory – The Eagle Has Landed – 50 Years Ago Today
News
94 views
News
94 views

Mal’s Moon Memory – The Eagle Has Landed – 50 Years Ago Today

Mal - Jul 20, 2019

Go for landing......immortal words from Houston control as The Eagle came closer and closer to where no man had gone…