Fonterra has lifted its forecast farmgate milk price range for 2023/24 to NZ$7kgMS—NZ$8kgMS, raising its midpoint by NZ25c to NZ$7.50kgMS. According to Fonterra CEO Miles Hurrell, the revised forecast reflects recent strengthening in demand from key importers, including China during Q1. Hurrell said Fonterra will continue to watch market dynamics closely as there is still potential for further volatility in commodity prices.

Fonterra reported improved performance in all three sales channels in Q1 FY24with profit after tax lifting 85% YOY to NZ$392m and EBIT rising 63% on the comparable to NZ$575m. Fonterra’s Ingredients, Foodservice and Consumer channels all recorded higher margins in Q1 with gross margin lifting to 21.4% YOY, up from 15.5% in Q1 last year. Hurrell said most milk was directed towards the higher returning Foodservice and Consumer channels helping improve margins. As a result, Fonterra lifted its forecast earnings for the year NZ$5c with the range now at NZ50c—NZ$65c per share.