Fonterra operative : lifts forecast Farmgate Milk Price range
January 24, 2022 at 02:44 pm EST
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Fonterra lifts forecast Farmgate Milk Price range
January 25, 2022
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Fonterra Co-operative Group today lifted its 2021/22 forecast Farmgate Milk Price range to NZD $8.90 - $9.50 per kgMS, up from NZD $8.40 - $9.00 per kgMS.
This increases the midpoint of the range, which farmers are paid off, by 50 cents to NZD $9.20 per kgMS.
Fonterra CEO Miles Hurrell says the lift in the 2021/22 forecast Farmgate Milk Price range is good news for both farmers and New Zealand communities. The new midpoint of $9.20 per kgMS would contribute $13.8 billion to the New Zealand economy this season.
"The increase is the result of consistent demand for dairy at a time of constrained global milk supply.
"In general, demand globally remains strong - although, we are seeing this vary across our geographic spread. Overall, global milk supply growth is forecast to track below average levels, with European milk production growth down on last year and US milk growth slowing due to high feed costs.
"It's a similar supply picture in New Zealand. Earlier this month we reduced our forecast milk collections for 2021/22 from 1,525 million kgMS to 1,500 million kgMS due to varied weather and challenging growing conditions.
"While the higher forecast Farmgate Milk Price does put pressure on our margins in our consumer and foodservice businesses, prices in our ingredients business are favourable for milk price and earnings at this stage. As a result, we remain comfortable with our current 2021/22 earnings guidance of 25-35 cents per share."
Mr Hurrell says there are a number of factors the Co-op is keeping a close eye on, including growing inflationary pressures impacting on operational costs, the increased potential for volatility as a result of high dairy prices and economic disruptions from COVID-19, particularly as governments respond to the rapid spread of the Omicron variant.
For further information contact:
Fonterra Communications
Phone: +64 21 507 072
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Fonterra Co-operative Group Limited published this content on 25 January 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 24 January 2022 19:43:00 UTC.
Fonterra Co-operative Group Limited is a New Zealand-based dairy co-operative company. The Company is primarily involved in the collection, manufacture and sale of milk and milk-derived products through its ingredients, consumer, and foodservice channels. It operates through three segments: Global Markets, Greater China, and Group Operations. The Global Markets segment represents the global ingredients, foodservice and consumer channels outside of Greater China. The Greater China segment represents the ingredients, foodservice and consumer channels in Greater China. The Group Operations segment represents the business activities from collecting and processing New Zealand milk, through to selling products to its customer-facing regional business units, Global Markets and Greater China. Its channel of branded consumer products includes powders, yoghurts, milk, butter, and cheese. The Companyâs brands include Anchor, Anmum, Anlene, and Chesdale, among others.