Fonterra provides 2022/23 opening forecast Farmgate milk price and update on business performance
Fonterra has announced its 2022/23 opening forecast Farmgate Milk Price and provided an update on its third-quarter performance. The opening forecast Farmgate Milk Price for the 2022/23 season is set at $8.25 – $9.75 per kgMS, with a midpoint of $9.00 per kgMS. CEO Miles Hurrell says the strong opening forecast reflects continued demand for dairy coupled with constrained global supply. “The long-term outlook for dairy remains positive, despite recent geopolitical and COVID-19 related events impacting global demand in the short-term. “On the supply side, growth from key milk producing regions is expected to remain constrained as high feed, fertiliser and energy costs continue to impact production volumes. “These demand and supply dynamics are expected to support dairy prices in the medium to long-term. “However, we are operating in an increasingly volatile global environment and are managing a wider range of risks than usual. “This includes the potential for further impacts from COVID-19, financial markets and foreign exchange volatility, global inflationary pressures, a tightening labour market, increasing interest rates, geopolitical events, as well as the possible impact on demand from higher dairy prices. “This is why our 2022/23 forecast range is so wide at this point in the season.” For the 2021/22 season, Fonterra has maintained its 2021/22 forecast Farmgate Milk Price of $9.10 – $9.50 per kgMS. “At a midpoint of $9.30 per kgMS, this would be the highest forecast milk price in the Co-op’s history and would see us contribute almost $14 billion into the New Zealand economy through milk price payments.” Business performance For the nine months ending 30 April 2022, Fonterra’s sales volumes were down as a result of lower milk collections and the timing of sales due to short-term impacts on demand including the lockdowns in China, the economic crisis in Sri Lanka and the Russia-Ukraine […]