Fonterra Raises Farmgate Milk Forecast Payout to $13.48/cwt
New Zealand dairy firm Fonterra on Thursday lifted its forecast milk payout for the 2016-17 season by NZ$0.15 to NZ$6.15 per kilogram (US$13.48/cwt), a sign the recovery in dairy prices was finally filtering through to the dairy giant.
"World dairy prices have risen in recent months and as we near the end of the season we have more visibility and certainty which makes us confident of our NZ$6.15 position ($13.48/cwt),” Fonterra chairman John Wilson said in a statement to the stock exchange.
Global dairy prices have risen five times in a row the past two months which has eased jitters that a recovery could be temporary.
After two years of declining prices, farmers and analysts had been concerned that a 50 percent rebound during 2016 was waning when prices were dented at the beginning of the new year due to a global supply increase.
The firm said the more lucrative prices over the past few months drove its revenue 8 percent higher in the nine months ending April to NZ$13.9 billion (US$9.7 billion).
The company said in a statement to the stock exchange that it was forecasting a Farmgate Milk Price of NZ$6.50 per kilogram (US$14.24/cwt) for the 2018 season.
Fonterra held steady its target dividend in 2017 of NZ$0.40 per share.
In its half-year results released in March, the co-operative had slashed its forecast earnings per share from NZ$0.50-NZ$0.60 per share to NZ$0.45-$0.5 per share.
