NZ's Fonterra lowers Farmgate Milk price forecast
Fonterra Group Ltd said on Wednesday it lowered its 2018-2019 guidance for its Farmgate Milk price due to a glut in global milk supply.
The world’s largest dairy exporter lowered the price for farmgate milk to a range of NZ$6.25 to NZ$6.50 per kgMS from the prior NZ$6.75 per kgMS.
Fonterra said the price forecast revison was triggered by higher production, rather than softer demand. It cited strong production coming from Europe, the US and Argentina as catalysts for the downward forecast. Global demand had not kept pace.
Local production has also been stronger than Fonterra previously expected. Fonterra has revised its forecast milk collections for the year up 1.3pc to 1,550 million kgMS – from 1,525 million kgMS.