Fonterra increases its forecasted milk price

Published 22 November 16

Fonterra Cooperative Group Limited has increased its farmgate milk price to NZ$6.00 per kg of milk solids or approximately 26.2ppl. This price increase is attributed to improvements in pricing since September. When combined with Fonterra’s forecasted dividend of NZ$0.50 to NZ$0.60 per share, it means the total payout available to farmers for the 2016/17 season is forecast to be equivalent to 28.4ppl to 28.8ppl.

Fonterra has now lifted its price for the current season by 54% since it was originally announced. However, movements in exchange rates mean that, when converted into a sterling equivalent, the Fonterra price is now almost double what it was at the start of the season. Those exchange rate moves have meant New Zealand products are now more expensive in the UK.