Dairy giant Fonterra has lifted its milk price by 75 cents in response to the recent lift in dairy prices at the GlobalDairyTrade auctions. Fonterra has increased its 2016/17 milk price forecast by 75 cents to $6 a kilogram of milksolids.
For a fully shared up farmer it has pushed the total payout available to farmers to $6.50-$6.60/kg MS before retentions. Chairman John Wilson said 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."
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