Fonterra downgrades production forecast, lifts price

by | Mar 2, 2022 | Forecast, Global

Fonterra New Zealand lifted its farmgate milk price forecast range for 2021/22 to NZ$9.30kgMS – NZ$9.90kgMS, up from NZ$8.90kgMS – NZ$9.50kgMS, lifting the midpoint by NZ40c. Fonterra CEO Miles Hurrell said the lift in the forecast reflects continued increases in WMP and SMP prices on GDT and firm global dairy demand along with tighter global milk supply growth. With a forecast midpoint of NZZ$9.60kgMS, Fonterra injects NZ$14bn in milk price payments into the NZ economy, which will be welcome news for farmers, facing rising costs on farm.

Ongoing challenging weather conditions continue to impact grass growth, prompting Fonterra to revise its 2021/22 milk collections forecast to 1,480m kgMS, down 3.8% on the prior season. Hurrell said the reduction in supply reinforces the cooperative’s strategic focus to use its milk for higher value products.