Fonterra has reduced its 2023/24 farmgate milk price forecast to a range of NZ$6.25kgMS – NZ$7.75kgMS, taking its midpoint to NZ$7.00kgMS, down from a midpoint of NZ$8.00kgMS.

Fonterra CEO Miles Hurrell said the reduction reflects ongoing reduced import demand for whole milk powder from Greater China. Hurrell said the opening forecast milk price for the 2023/24 season reflected an expectation that China’s import demand for WMP would lift in the medium-term. However, since then GDT WMP prices have fallen 12% with China’s share of WMP volumes on GDT events tracking below average levels due to surplus fresh milk in China flowing into local WMP production. Ending on a positive note, Hurrell remarked that the medium to long-term outlook for New Zealand dairy looks positive with milk production from key exporting regions flat when compared to the prior year.

Meanwhile, NZX has also revised its 2023/24 forecast down by NZ38c to NZ$7.47kgMS following weak results at the latest GDT event and falling dairy commodity futures prices on the SGX-NZX Dairy Derivates market. The forecast range has been revised to NZ$7.25kgMS – NZ$7.93kgMS and includes off-GDT sales which add NZ8c, based on an estimated exchange rate for the full season of US$0.6254.

NZX’s milk price estimate for the 2022/23 season is unchanged at NZ$8.43kgMS, including off-GDT sales adding NZ8c and an exchange rate of US$0.6325.