Fonterra milk price review expected as New Zealand processors cut forecasts
Fonterra is currently holding its 2014-15 forecast milk price at $5.30/kgMS (kilos of milk solids), despite the recent fall in GDT price.
However, the processor is expected to revise this on December 9 according to DairyCo.
In the last month several other New Zealand processors have cut their predicted prices, with Westland reducing by 40 cents to a range of $5.00-5.40/kgMS, Open Country predicting $4.70-4.90/kgMS and Synlait now at $5.00/kgMS.
Here at home average producer milk prices will range between 24c/L and 26c/L in 2015, according to Irish Dairy Board (IDB) analyst Fergal McGarry.
Speaking at the ICMSA Annual Meeting in Limerick he added that Russia’s decision to introduce a ban on EU food imports was the last straw in condemning EU milk prices to the downward spiral that has come to pass.
“The reality is that 2015 will be a difficult year for the Irish milk industry,” he said.
“Our Production Price Index has fallen from its January 2014 high of 133 to the current value of just below 100. We are predicting that the Index will fall further during the first six months of 2015 but will start to rise thereafter.
“The index was created to provide farmers with a degree of transparency with regard to the market returns that can be delivered to them. And it is our intention to further develop this principle in 2015.
“But predictions are only predictions; what I can say with certainty is that nothing solves low prices like low prices.”