Fonterra has reduced and narrowed its 2022-23 forecast farmgate milk price range by 50c to $8.20-8.80/kg MS, with a midpoint of $8.50.
The co-operative also updated its forecast milk collections for the 2022-23 season to 1465 million kg MS, down from its previous forecast of 1480 million kgMS.
Chief executive Miles Hurrell said the revised forecast 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,” Hurrell said.
“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 Fonterra’s collections for the season are up on this time last year, Cyclone Gabrielle and dry conditions in the South Island have impacted the co-op’s full season expectations.
“Globally, milk supply from key exporting regions is balanced. Production from Europe and the United States 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,” Hurrell said.
