Fonterra raises forecast 20c

AUCKLAND: Fonterra has lifted its 202021 forecast farmgate milk price range up by 20c/kg to $6.90$7.50/kg.

The midpoint of the range, from which farmers are paid, has increased to $7.20 per kg from $7.

Fonterra’s move follows the sixth positive GlobalDairyTrade (GDT) auction result in a row.

Whole milk powder, the biggest influence on the cooperative’s milk price, backed up a 7% gain in the previous event with a further 2.3% rise to an average $US3458 a tonne.

Fonterra chief executive Miles Hurrell said the lift in the 202021 forecast range was the result of strong demand for dairy demonstrated by the continued increase in GDT prices since the coop last revised its milk price in December.

‘‘In particular, we’ve seen strong demand from China and Southeast Asia for whole milk powder and skim milk powder, which are key drivers of the milk price,’’ Fonterra chief executive Miles Hurrell said in a statement.

At the revised price, the coop would contribute almost $11 billion to the New Zealand economy through milk price payments this year, he said.

‘‘Now that we’re through the peak of the 2021 milking season, the impact of any changes in global market dynamics is reducing and our view of the season is firming up.’’

However, the cooperative was continuing to keep a close eye on several factors, including New Zealand weather conditions, expected challenges from further waves of Covid19 and increasing milk production in the northern hemisphere.

Fonterra is due to announce its firsthalf results on March 17. — The New Zealand Herald