Following price rises at last week’s GDT Event farmgate milk price forecasts have been upgraded, with Westpac lifting its 2022/23 forecast milk price to NZ$8.50kgMS, while acknowledging upside pressure to its current season forecast of NZ$9.50kgMS. Senior agri economist Nathan Penny said GDT prices surging well beyond previously expected levels, prompted the rise with a weaker New Zealand dollar supporting a higher forecast for next season. Penny said upside risks to an already record high forecast for the 2021/22 season were growing. Westpac expects local production to fall by 3% this season, up from the previous forecast of a 1.5% decline, due to bad weather and high feed and other costs. Penny said the tension between Russia and the Ukraine will put further upward pressure on grain and fertiliser prices. 

Fonterra lifted its farmgate milk price forecast last month. But managing director of corporate affairs Mike Cronin said management continues to run the numbers following the positive GDT Event as demand remains steady, particularly from North Africa and the Middle East. GDT prices have lifted close to 14% over 2022 while WMP prices have gained over 16%.