New Zealand’s largest dairy company, the Fonterra Co-operative Group, has lifted its forecast milk price for the 2024/25 season and also delivered an upbeat operations forecast today (Friday, August 23) on the back of stronger commodity prices.
Fonterra confirmed a 50 cent increase in its forecast farmgate milk price midpoint for the 2024/25 season – an uplift to the full year 2025 (FY25) advance rate schedule, and also advised that its FY24 earnings are now forecast to be at “the top end of the announced range of 60-70 cents per share”.
Fonterra’s new forecast range is NZ$7.75-$9.25 per kilograms of milk solids (kgMS) up from NZ$7.25-$8.75 per kgMS.
The new midpoint is up 50 cents to NZ$8.50 per kgMS.”
According to Fonterra’s chief executive officer (CEO) Miles Hurrell, the latest forecasts reflect the recent lift in GDT prices and the strength of the co-op’s balance sheet.
“Since announcing our opening FY25 season forecast farmgate milk price in May, GDT prices have improved.
“We’re also pleased to be announcing an uplift in our advance rate payment schedule, which will see farmers paid more for their milk earlier in the season,” Hurrell added.
Fonterra
The Fonterra CEO also said that the co-op’s balance sheet strength has enabled it to “make several enhancements to the advance rate schedule over the last two seasons”.
Hurrell said that the latest adjustments announced today will see farmers paid 10% more of the FY25 forecast farmgate milk price from December paid January compared to other seasons, which he said would assist farmers with “on-farm cash flow”.
Looking ahead the co-op has also outlined that its FY24 earnings from continuing operations are forecast to be “at the top end of the announced range of 60-70 cents per share”.
“As we look to close out the books for the year, it’s become clear that we have maintained strong performance across FY24.
“We’re indicating we expect our earnings to be at the top end of our forecast range and this puts us on track for a strong full year dividend,” Hurrell said.