Fonterra forecasts closing price of $6.20/kg

By Dairy News

FONTERRA AUSTRALIA says its forecast closing farmgate milk price for the 2018–19 season is $5.50 to $6.20 per kilogram of milk solids.

Fonterra Australia Managing Director René Dedoncker said the range was based on “market indications which show a continued positive global supply and demand picture”

“Demand is expected to remain strong, especially from China and for butter and AMF, and the global dairy market’s current prices are expected to continue throughout the new season,” Mr Dedoncker said.

He said their decision to invest in cheese markets in China and Japan provided more opportunities to grow the value of farmers’ milk.

“At the same time, we continue to make efficiency improvements, which means we have the right asset base to play to our strengths in cheese, whey and nutritionals.”

Mr Dedoncker said Fonterra expected seasonal growth from its existing farmers to continue next season, which would help it meet customer demand.

Fonterra opened at $7/kg MS in New Zealand. It is currently paying $6.75/kg MS in New Zealand.

Saputo Dairy Australia (formerly Murray Goulburn) announced a step up in its farmgate milk price of 5c for fat and 11c for protein.

It increases the average farmgate milk price for the 2017–18 season to $5.68 kg/MS, up from $5.60/kg. It will be paid to all current WCB and MG suppliers.

Australian Dairy Farmers Corporation will pay up to $6/kg MS this season.

To receive this price, suppliers must produce more than 44 per cent of their milk for six months from mid-February.

Those who produce less than 39 per cent during this time will receive an opening price of $5.60 kg.

ADFC had been supplying 200 m litres to Bulla Dairy Foods but negotiations have broken down.

It has not disclosed where the milk will go. Bulla is now seeking its own supply base.

Earlier this year Bega Cheese said it would continue its 2017–18 price of $5.63/kg MS through to September.

Bega will announce milk payments for October onwards before September.