Synlait Milk is reducing its forecast base milk price for the 2022-23 season to $8.50 per kilogram of milk solids (kg MS) from $9/kg MS.
In a notice to the New Zealand stock exchange (NZX), Synlait said the key drivers of the revised forecast were subdued global economic activity as well as a slower-than-expected recovery of Chinese demand following the pandemic.
The company said global milk production was showing signs of recovery in late 2022. This added further downward pressure to dairy commodity prices.
“These factors have reduced the price Synlait has achieved on its commodity products and underpin the decision to reduce the forecast base milk price to $8.50/kg MS,” the company said.
Synlait said it would continue to monitor movements and keep farmer suppliers updated.
Synlait had already shaved 50 cents off its 2022-23 milk price forecast in December, taking it from $9.50/kg MS to $9/kg MS.