Last Friday, Fonterra Co-op, the largest New Zealand-owned dairy co-op, revised upwards its earnings guidance. It announced revised 2023 earnings from 45 to 60 cents per share, up from 30 to 45 cents per share.

It has also revised its forecasted milk collections for the 2022/2023 season down from 1,510m kg milk solids to 1,495m kg.

Fonterra CEO Miles Hurrell said the lift in forecast earnings is a continuation of the ongoing strong demand for dairy that saw Fonterra confirm its full year 2022 earnings were at the top end of the guidance range.

He said: “We see strong underlying demand and the latest lift in whole milk powder prices on GDT is also a positive signal reversing the recent easing in the prices that drive our Farmgate Milk Price.

“Strong offshore prices for protein, as reflected in the recent increase in EU and US milk prices, mean our protein portfolio has been performing very well,” he concluded.

Hurrell said that Fonterra Co-op is comfortable with its full year 2023 contracted rate, particularly for its protein portfolio at this stage of the season, despite the fact its still early days in the New Zealand season.

New Zealand milk supply, which normally peaks in October, is being delayed as adverse weather conditions impact parts of New Zealand. Floods in the Far North and top part of the South Island have caused problems for milk collection.