Fonterra has raised the forecast for its farmgate milk price for the 2019/20 milking season. The New-Zealand farmer-owned co-op issued a statement on Monday night saying it is raising its forecast milk price for 2019/20 from a range between 25-29c/litre ($6.25-$7.25/kg of milk solids) to a new range of 26-30c/litre ($6.55-$7.55/kg of milk solids).

Firm demand

Fonterra chair John Monaghan said the co-op has been achieving good prices for its milk so far this season, with demand for whole milk powder (WMP) said to be firm.

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“Demand for WMP has been firm, and for the full season we’re expecting it to be above last year. Global WMP production is down year to date and expected to continue to decrease for the remainder of 2019. We are also continuing to sell our skim milk powder at higher prices than EU and US dairy companies on the GDT auction,” said Monaghan.

Positive signals

Miles Hurrell, chief executive (CEO) at Fonterra, said it was still very early days in the 2019/20 milking season but there were a lot of positive signals for milk prices. However, Hurrell warned that a lot can change in global markets and said the co-op will keep a close eye on global trade tensions and political instability in some of New Zealand’s key sales regions.

Production

Meanwhile, new figures from Dairy Industry New Zealand (DCANZ) show New Zealand dairy farmers pumped out 2.6bn litres of milk for the month of September, which was down almost 1% on the same month last year.

This brings New Zealand milk production for the first four months of the 2019/20 milking season (June–Sept) to a cumulative 4.4bn litres, which is 0.7% ahead of the same period last year.