Monday, March 4, 2024

Fonterra lifts forecast on back of global dairy rise

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Lift in farmgate milk price follows five strong Global Dairy Trade events.
Fonterra CEO Miles Hurrell says that ‘GDT prices have fallen sharply since we released our opening forecast for the season in May, with the overall index down 16% over that period’.
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Fonterra has increased the midpoint of its forecast farmgate milk price by 30c a kilogram to $7.80 kg MS for this season, citing rising international prices.

This increases its new forecast range for the season to $7.30-$8.30 per kg/MS, up from $7.00-$8.00 per kg/MS. 

Fonterra chief executive Miles Hurrell said the lift in the farmgate milk price follows five strong Global Dairy Trade (GDT) events

“Recently, we’ve seen a lift in demand, primarily from the Middle East and southeast 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.”

He said there is still uncertainty from the potential impact of geopolitical instability and supply chain disruption.

“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-op’s product to customers through our partnership with [logistical company} Kotahi,” says Hurrell.  

Fonterra’s forecast earnings guidance for FY24 of 50-65 cents per share remains unchanged.

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