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Fonterra cuts new season farmgate milk price

Dairy processor Fonterra has announced an opening farmgate milk price of $4.75 kgms for 2016/17 and forecast a closing price $5.00 kgms for the season.

The announcement follows the release of Murray Goulburn’s forecast of $4.80 kgms for the season.

Fonterra Chief Operating Officer of Velocity and Innovation, Judith Swales (pictured) said in a statement the forecast assumes the Australian dollar will remain at about 74 US cents.

“Our farmgate milk price in Australia is also impacted by global dairy markets given our mix of domestic and export sales,” Swales said.

“While we are still seeing an imbalance between global milk supply and demand there are signs in key milk producing areas of a slowdown in production and increased imports into key markets such as China, Asia and Latin America. This supports our view of a recovery in global prices as we move through the season.”

Individual suppliers’ milk prices will vary across Fonterra’s supply regions, depending on the individual farm’s milk profile, regional production factors, milk quality and farm management systems.

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