Fonterra increase milk price forecast

Published 26 May 16

Fonterra has today (26 May) announced its forecast farmgate milk price for the 2016/17 season, and it’s gone up!  The Fonterra price forecast of $4.25 per kgMS is an increase of $0.35 on the forecast for the current season. The 2016/17 season starts on 1 June.

Fonterra stress that the increase has been enabled thanks to the strength of its balance sheet. The co-op is effectively using its reserves to increase the advance rate paid to farmers in the first half of the new season. Fonterra also announced it is bringing forward payments for the current season’s milk, to aid farmers’ cashflows.

Converted into sterling, the forecast price equates to around 15ppl.

Looking ahead, Fonterra states that it expects global dairy pricing to gradually improve over the season, as farmers globally reduce production in response to ongoing low milk prices.