Fonterra has lifted its 2021/22 forecast farmgate milk price range to NZ8.90kgMS – NZ$9.50kgMS, up from NZ$8.40kgMS – NZ$9.00kgMS. The midpoint is lifted by NZ50c to NZ$9.20kgMS. According to Fonterra chief executive Miles Hurrell attributes the price hike to consistent strong demand for dairy at a time of constrained global milk supply with overall global growth forecast to be below average.

Hurrell said while higher forecast farmgate milk price puts pressure on margins in Fonterra’s consumer and foodservice businesses, prices in Fonterra’s ingredient business remain favourable for milk price and earnings. Fonterra’s 2021/22 earnings guidance continues to be NZ25c – NZ35c per share.