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Fonterra maintains milk price despite China slowdown

Fonterra Co-operative Group has said it has maintained a forecast Farmgate Milk Price of $4.60 per kgMS. Along with the November announced estimated Earnings Per Share range of 45-55 cents, this amounts to a total available for payout of $5.05-$5.15 kgMS and would currently equate to a total forecast Cash Payout of $4.95-$5.00.

 Chairman John Wilson said the stable forecast reflected the Board and management’s view that international prices would continue to improve in the first half of next year.  

“While there are signs of a recovery, particularly in China, we still need the imbalance between supply and demand to correct.”

“That imbalance is starting to reduce with year to date production in the United States up by only one per cent and slowing, and New Zealand volumes expected to be down by at least six per cent over the current season. In the EU, however, farmers are continuing to push production, currently up one per cent.”

“We will provide some $390 million in support to around 75 per cent of our farmers through the most productive half of the season, including the peak."

Farms typically produce 60 per cent of their milk in the first half, with production beginning to taper off from December, so we have provided support when it is needed the most,” Wilson said.

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