The change has been expected for some time due to decreasing dairy commodity prices and was indicated as a possibility at the annual shareholder meeting in November.
“Until recently commodity prices have been declining for some time,” said Leon Clement, Synlait’s CEO.
“This is in part due to global demand reacting to very strong production from New Zealand carrying into summer, alongside expectations of better production growth out of the Northern Hemisphere.”
The company said the NZ$6.25 kgMS forecast price is dependent on commodity prices continuing to recover for the rest of the season but this is considered realistic.
“Our milk suppliers will not be surprised by this change as we communicate openly with them about the fluctuations in global pricing on a regular basis,” Clement said.
“We will continue to monitor the situation as we approach the end of the season in June.”
Synlait’s next milk price update for the 2018/2019 season will be in May.