Fonterra offers guaranteed milk price contracts

Following its recent announcement of the 2015/16 forecast Farmgate Milk Price, applications are now open for Fonterra farmers to lock in a Guaranteed Milk Price (GMP) for a percentage of their milk.

Farmers who are looking for a GMP can now apply to supply some of their estimated milk production across one or more of five prices ($5.25, $5.15, $5.05, $4.95, and $4.85) at and below the 2015/16 forecast Farmgate Milk Price.

Fonterra is offering two opportunities in the 2015/16 season to secure a GMP on 60m kgMS – up to 40m kgMS is available in June, and up to 20m kgMS will be available in December.

The application period runs until Friday, June 19, and once the applications close, the total kgMS offered by all applicants at each price will be totalled.

Allocations will be made based on the prices at which milk solids were offered from the lowest price up and the GMP will be determined at the highest price at which a total quantity of milk solids in a specified range is reached.

Fonterra’s Head of Origination, Arron Atkinson, said dairy farmers have the option to apply their volumes across one or more of five prices at and below the 2015/16 forecast Farmgate Milk Price. This process allows for the prioritisation of allocation in the event that the GMP is oversubscribed.

“All accepted applications will receive the same Guaranteed Milk Price. However, it’s important to note that depending on the total milk solids offered at each price, some farmers may not get all or any of the volume they offered,” he said.

 

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