Fonterra, the giant New Zealand dairy co-operative has lowered the milk price it expects to pay farmers for the 2023/2024 season.
It announced on Friday that it expects the farm gate milk price to be between $6 and $7.50 per kilo of milk solids with a mid-point of $6.75/kg MS.
This is down from its forecast in early August of $6.25 to $7.50 per kilo of milk solids.
This forecasted price sent shockwaves through the dairy industry worldwide as it represented a $1/kg MS or 12.5% cut to forecasted milk price.
For the co-op to revise milk price downwards again so soon will be further bad news for dairy farmers.
Midpoint forecast price
The new midpoint forecast price, when converted to cent per litre is 23.9c/l at 3.30% protein and 3.60% fat.
Fonterra CEO Miles Hurrell blamed sharp declines in the Global Dairy Trade auction and poor global demand for milk; “Reduced demand from key importing regions for whole milk powder is continuing to weigh on prices. While indications are demand will start to return over the second half of 2024, we do expect the pace of demand growth to be subdued relative to initial expectations.”
He said that it was a challenging time for New Zealand’s dairy farmers and that the co-op is doing all it can to support them.
The cut to the Fonterra forecast price follows on from a spate of milk price cuts in Ireland this week, with Lakeland, Dairygold, Kerry Group and Tirlán all slashing base milk price for July.
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