Fonterra has revised its forecast farmgate milk price range to a range of NZ$9.10kgMS – NZ$9.50kgMS, down from NZ$9.30kgMS – NZ$9.90kgMS. Fonterra said the milk price revision is due to a number of recent events that have resulted in short-term impact on global demand for dairy products, including new COVID-19 lockdowns in China, an economic crisis in Sri Lanka and the Russia-Ukraine conflict.

Fonterra CEO Miles Hurrell said the short-term impacts included an 18% fall in average WMP prices over the past four GDT events. However, the long-term outlook for dairy remains positive and global demand and supply is expected to be more balanced over the remainder of the year. Hurrell said a midpoint payout of NZ$9.30kgMS would see Fonterra contribute almost NZ$14bn to the NZ economy. Hurrell said Fonterra would continue to keep a close eye on the potential impacts on demand from inflationary pressures and rising interest rates, increased volatility due to high diary prices and further COVID-19 and geopolitical disruptions.