It’s good news all round for farmers and the transport industry, with Fonterra increasing its 2016/17 forecast Farmgate Milk Price by 75 cents to $6 per kg of milk solids.
The forecast earnings per share range for the 2017 financial year is between 50 to 60 cents, putting the total forecast payout available to farmers in the current season at $6.50 to $6.60 before retentions.
Chairman John Wilson says the increase reflects improvements in pricing since
September, following the gradual rebalancing of global supply and demand.
“We’ve seen falling production in the major exporting regions, particularly Europe and Australia, and an unprecedented decline in New Zealand milk supply due to wetter than normal spring conditions across most regions.
“On balance, demand continues to be firm. As a result there has been a steady improvement in global dairy commodity prices and this is reflected in the improved forecast.”
Fonterra’s first quarter revenue of $3.8 billion is up six per cent on the same period last year, though Wilson says market volatility could affect earnings later in the year.
