Forecast for Synlait milk price reduced
SYNLAIT has dropped its 201819 milk price forecast from $6.75 to $6.25, following on from Fonterra’s earlier revision.
The Mid Canterburybased milk processor said the change had been expected for some time and the possibility signalled at the annual shareholder meeting in September.
Until recently, dairy commodity prices had been declining for a while. That was partly 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, chief executive Leon Clement said.
In December, Fonterra revised its forecast milk price range from $6.25$6.50 to $6$6.30, citing global milk supply remaining stronger relative to demand.
Prices rose 4.2% in the most recent GlobalDairyTrade auction, the fourth successive price gain, and economists said improved prices had removed some of the downside risk to Fonterra’s forecast.
Yesterday, Synlait signalled its $6.25 forecast was dependent on commodity prices continuing to recover for the rest of the season but that was considered realistic in light of supportive global demand fundamentals.
Synlait’s next milk price update would be in May.