Fonterra increases FY24 forecast Farmgate Milk Price


Fonterra Co-operative Group Ltd has today increased its 2023/24 season forecast Farmgate Milk Price, with the midpoint lifting by 30 cents to $7.80 per kgMS, up from $7.50 per kgMS.

The forecast range for the season increases to $7.30-$8.30 per kgMS, up from $7.00 – $8.00 per kgMS.

Fonterra CEO Miles Hurrell says the lift in the Farmgate Milk Price comes off the back of five strong Global Dairy Trade events.

Recently, weve seen a lift in demand, primarily from the Middle East and South East Asia, for our reference commodity products and this has been reflected in GDT prices.

Overall GDT prices are up 10% since our last Farmgate Milk Price update in December, with whole milk powder prices up 11.5% over the same period.

Looking ahead, the potential impact of geopolitical instability and supply chain disruption on demand from key importing regions remains uncertain.

We can navigate these dynamics thanks to our scale and our diversification across markets, which provides us with optionality. We are also well placed to continue to get the Co-ops product to customers through our partnership with Kotahi, says Mr Hurrell.

Fonterras forecast earnings guidance for FY24 of 50-65 cents per share remains unchanged.

Fonterra revises FY23 forecast Farmgate Milk Price and collections


Fonterra Co-operative Group Ltdreduced and narrowed its 2022/23 season forecast Farmgate Milk Price range from $8.50 – $9.50 per kgMS, with a midpoint of $9.00, to NZ$8.20 – $8.80 per kgMS, with a midpoint of $8.50.

At the same time, Fonterra updated its forecast milk collections for the 2022/23 season to 1,465 million kgMS, down from its previous forecast of 1,480 million kgMS.

Fonterra CEO Miles Hurrell says the revised forecast Farmgate Milk Price range reflects softened demand at a time of balanced supply.

Demand for Whole Milk Powder, particularly from Greater China, has been soft with prices down around 5% since the beginning of December.

While we are encouraged by recent increased buying behaviour from China, it is too soon to determine the extent of the impact this may have on the rest of the season. We also remain cautious given a soft economic growth outlook in many regions globally.

Looking at milk production, while Fonterras collections for the season are up on this time last year, cyclone Gabrielle and dry conditions in the South Island have impacted the Co-ops full season expectations.

Globally, milk supply from key exporting regions is balanced. Production from Europe and the US is up on last year, but this is partly offset by lower collections in New Zealand, Australia and Latin America.

The medium to long term outlook for dairy, in particular New Zealand dairy, looks positive. We are assessing our position for next season and will provide our opening forecast in May, says Mr Hurrell.

Fonterra provides milk price update

2022/23 forecast Farmgate Milk Price range revised from NZ$8.75-$10.25 per kgMS to NZ$8.50-$10.00


Fonterra today revised its 2022/23 forecast Farmgate Milk Price range from NZ$8.75-$10.25 per kgMS to NZ$8.50-$10.00 per kgMS. 

This reduces the midpoint of the range from NZ$9.50 to NZ$9.25 per kgMS, however the current advance payment rate of NZ$5.70 per kgMS is unchanged.

Fonterra Chief Executive Miles Hurrell says “the change in the 2022/23 forecast Farmgate Milk Price will be disappointing for our farmers but it reflects a number of factors, including the recent downward trend in global dairy prices driven by some short-term softening in global demand, and the general impact of inflation on purchasing behaviour. However, we believe the longer-term outlook for dairy remains positive,” says Mr Hurrell.

Fonterra will release its financial results for the year ending 31 July 2022 on Thursday, 22 September 2022.