New Zealand 12.02.2024

Fonterra Boosts Forecasted Farmgate Milk Price for FY24 by 30 Cents to NZ$7.80 per kgMS

Source: The DairyNews
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In a strategic move, Fonterra Co-operative Group Ltd has revised its forecast for the 2023/24 season Farmgate Milk Price, increasing the midpoint by 30 cents to NZ$7.80 per kgMS, a significant jump from the initial NZ$7.50 per kgMS projection, Dairynews.today writes.
Fonterra Boosts Forecasted Farmgate Milk Price for FY24 by 30 Cents to NZ$7.80 per kgMS
The revised forecast range now stands at NZ$7.30-$8.30 per kgMS, up from the previous estimate of NZ$7.00-$8.00 per kgMS.

Fonterra CEO, Miles Hurrell, attributes this positive adjustment to five robust Global Dairy Trade events. Hurrell notes a surge in demand, particularly from the Middle East and South East Asia, for their key commodity products, contributing to a 10% overall increase in GDT prices since the last Farmgate Milk Price update in December. Whole milk powder prices have surged by 11.5% during the same period.

While acknowledging the uncertainty arising from geopolitical instability and potential disruptions in the supply chain, Hurrell expresses confidence in Fonterra's ability to navigate these challenges. He highlights the company's scale and diversified market presence as key factors providing flexibility. Additionally, Fonterra's strategic partnership with Kotahi positions them well to continue delivering products to customers.

Despite the adjustment in the Farmgate Milk Price, Fonterra maintains its forecasted earnings guidance for FY24 in the range of 50-65 cents per share, signaling stability and confidence in the Co-operative's financial outlook.
Lee Mielke
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Aaron Smith
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February 2024
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