Synlait cuts milk price

SYNLAIT MILK has revised its forecast of the market milk price for the ‘‘FY2015’’ season down from $5.00 a kilogram of milksolids to $4.40 per kg/MS.

The Canterbury-based milk processor said there would be a corresponding decrease in advance rates to farmers.

The manufacturer of milk powder has a financial year to July 31. It is maintaining its full-year results guidance.

The company, which follows other New Zealand manufacturers in price downgrades, expects to update its forecast towards the end of May.

Synlait Milk chairman Graeme Milne said this revision was the result of several factors at play in the global market, which were causing continued downward pressure on milk prices.

‘‘Low commodity prices are persisting as the global market struggles with the current oversupply of milk products,’’ Milne said.

‘‘We remain confident in previous guidance around our FY2015 performance, although there is no doubt that the world continues to be a volatile place.’’

Global events including weaker demand for milk and a good supply have sent dairy prices in a downward trend since February last year.

The downturn has prompted New Zealand dairy giant Fonterra to repeatedly slash its forecast farm-gate milk price to $4.70/kg, compared with the previous season’s record $8.40/kg.

Late last year Westland Milk Products reduced its forecast milk price to $5-$5.40.