Fonterra Co-operative Group CEO Miles Hurrell says higher margins and sales volumes in the co-op's Foodservice and Consumer channels, which helped offset lower returns in its Ingredients business, were behind its strong performance in FY24.

Fonterra revises FY23 farmgate price

By Pippa Haupt | 24 February 2023

Fonterra has reduced and narrowed its 2022/23 season forecast farmgate milk price range from $8.50 - $9.50 per kgMS, with a midpoint of $9.00, to NZ$8.20 - $8.80 per kgMS, with a midpoint of $8.50, also updating its forecast milk collections to 1,465 million kgMS, down from its previous forecast of 1,480 million kgMS.

Fonterra CEO Miles Hurrell says the revised forecast farmgate milk price range reflects softened demand at a time of balanced supply, saying demand for whole milk powder, particularly from Greater China, had been soft, with prices down around 5 per cent since the beginning of December.

“While we are encouraged by recent increased buying behaviour from China, it is too soon to determine the extent of the impact this may have on the rest of the season. We also remain cautious given a soft economic growth outlook in many regions globally,” said Hurrell.

Despite Fonterra’s milk production collections for the season being up on this time last year, the company says cyclone Gabrielle and dry conditions in the South Island have impacted the co-op’s full season expectations.

“Globally, milk supply from key exporting regions is balanced. Production from Europe and the US is up on last year, but this is partly offset by lower collections in New Zealand, Australia and Latin America.

“The medium to long term outlook for dairy, in particular New Zealand dairy, looks positive. We are assessing our position for next season and will provide our opening forecast in May,” said Hurrell.