Fonterra has increased its forecast farmgate milk price range to NZ$6.30kgMS – NZ$7.30kgMS, lifting its mid-point to NZ$6.80kgMS for 2020/21.

Fonterra CEO Miles Hurrell said the stronger milk price forecast is a result of improved demand in China, with demand for WMP recovering quicker than expected. Hurrell said the demand was reflected in GDT auctions with prices trending up in recent events. The wide forecast range is retained as a precaution as Fonterra is still keeping an eye on a variety of factors this early in the season. Exchange rate volatility, increased EU and US milk supply, and continued uncertainty regarding the spread of COVID-19 are all on the watch list.