Fonterra has slashed its milk price forecast for the 2023-2024 season, reducing the range from $7.25-$8.75/kg milk solids to $6.25-$7.75/kg MS.
It changes the forecast midpoint to $7/kg MS from $8/kg MS.
Fonterra chief executive Miles Hurrell said the revised forecast range reflects ongoing reduced import demand for whole milk powder from greater China.
“When we announced our opening 2023-2024 season forecast farmgate milk price in May, we noted it reflected an expectation that China’s import demand for whole milk powder would lift over the medium term.
“Since then, overall Global Dairy Trade whole milk powder prices have fallen by 12%, and China’s share of whole milk powder volumes on GDT events has tracked below average levels.
“This reflects a current surplus of fresh milk in China, resulting in elevated levels of local production of whole milk powder, and reducing near-term whole milk powder import requirements.”
“The medium- to long-term outlook for dairy, in particular New Zealand dairy, looks positive with milk production from key exporting regions flat compared to last year,” Hurrell said.