Fonterra revises down 2023/24 milk price forecast

The reduced import demand for whole milk powder from greater China prompted New Zealand’s largest dairy company, the Fonterra Co-operative Group, today (Friday, August 4) to revise down its milk price forecast for the 2023/2024 season.

The chief executive of the global dairy nutrition co-op, owned by 9000 farmers, said that the revised forecast farmgate milk price reflected the current market position.

“When we announced our opening 2023/24 season forecast farmgate milk price in May, we noted it reflected an expectation that China’s import demand for whole milk powder would lift over the medium-term.

“Since then, overall Global Dairy Trade (GDT) whole milk powder prices have fallen by 12%, and China’s share of whole milk powder volumes on GDT events has tracked below average levels,” he said.

Fonterra’s chief executive, Miles Hurrell, said this reflects” a current surplus of fresh milk in China, resulting in elevated levels of local production of whole milk powder, and reducing near-term whole milk powder import requirements”.

Milk price drop

Fonterra today confirmed that it has cut its milk price from $7.25 – $8.75 per per kilograms of milks solids (kgMS) with a midpoint of $8.00 per kgMS, to $6.25 – $7.75 per kgMS, with a midpoint of $7.00 per kgMS.

Hurrell however remained relatively upbeat despite today’s revised forecasts.

He said: “The medium to long term outlook for dairy, in particular New Zealand dairy, looks positive with milk production from key exporting regions flat compared to last year.”