Fonterra hikes farmgate milk price by 25 cents

By Jim Cornall

- Last updated on GMT

Fonterra is hiking its milk price by 25 cents per kgMS.
Fonterra is hiking its milk price by 25 cents per kgMS.

Related tags Fonterra co-operative group Milk Supply and demand

New Zealand’s Fonterra Co-operative Group Limited has announced an increased forecast Farmgate Milk Price for the upcoming 2018 season, to NZ$6.75 (US$5.09) per kilogram of milksolids (kgMS).

Chairman John Wilson said the revised forecast price is an increase of 25 cents (US$0.19) on the original forecast in May 2017, and reflects the ongoing rebalancing of supply and demand in global dairy markets.

Wilson said there is growing confidence across the country and, with global demand for dairy strengthening, the signs are for a good start to the season for Fonterra’s farmers and their rural communities.

He cautioned, however, that there had been a challenging period of very wet conditions for some farmers.

Chief executive Theo Spierings said Fonterra is well positioned to take advantage of improving demand for dairy nutrition across its ingredients, consumer and foodservice markets.

“Our forecasts are prudent given that we are still early in the season and we are starting with very low levels of inventory, and we are focused on continuing to demonstrate strong business performance so as to bring greater returns for our farmers,”​ Spierings said.

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