#Fonterra announces NZ forecast price

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FONTERRA has announced an opening forecast farmgate milk price for its New Zealand farmers of NZ$7 a kilogram milk solids for the 2014-15 season.

The co-op also confirmed it is reducing the current NZ farmgate forecast for 2013-14 to NZ$8.40/kg MS.

Chairman John Wilson said the last forecast, made in February, was a net NZ$8.65.

Mr Wilson said the new season price forecast remained historically high, matching the co-op’s opening price of the previous season, but also reflecting current market conditions.

“Our farmers understand the realities of dairy commodity price cycles, and will exercise caution at this early stage in the season,” he said.

Fonterra is also forecasting milk supply for the new season of 1616 million kg MS – up 2% on the current season forecast of 1584 million kg MS.

Last week, Fonterra Australia announced its sixth step-up for the season, taking the average farmgate milk price to A$6.80/kg MS.

Victorian and Tasmanian suppliers will receive 8c/kg of butterfat and 20c/kg of protein for this season. The average closing price range for Australia in 2013-14 is now at A$6.80-$7/kg MS.

Fonterra NZ chief executive Theo Spierings said the shift in supply and demand in the past few months showed that volatility continued to exert a strong influence over the global outlook for dairy.

“Dairy commodity prices have come off the peak reached in early February this year, as global supply and demand have rebalanced,» Mr Spierings said.

“There is currently more milk available for the international market to absorb. We expect demand from China to remain strong.

«In Russia, there will be pressure on the balance between imports and local production. These factors are expected to continue influencing the supply-demand balance.”

Mr Spierings said volatility remained an issue. The revised forecast reflects the recent fall in global dairy commodity prices, as well as the impact of currency movements.

Fonterra and Nestlé have realigned their 10-year old Dairy Partners Americas (DPA) 50/50 joint venture and signed binding agreements covering the revised scope of the partnership.
Under these agreements, signed this week in Sao Paulo, Brazil:
• Fonterra will take a 51% controlling stake in DPA Brazil, with Nestlé holding the balance.
• Fonterra and its local partner will acquire Nestlé’s share of DPA Venezuela, and will continue to operate the business as a joint venture.
• Fonterra will sell its share in DPA’s milk powder manufacturing business to Nestlé.
• Nestlé will buy Fonterra’s share in Ecuador.
Mr Spierings said the DPA joint venture has performed well for 10 years and the time was now right to realign the partnership to better reflect the respective strategies of Nestlé and Fonterra in the region.
 
Source: The Australian Dairy Farmer

Mirá También

Así lo expresó Domingo Possetto, secretario de la seccional Rafaela, quien además, afirmó que a los productores «habitualmente los ignoran los gobiernos». Además, reconoció la labor de los empresarios de las firmas locales y aseguró que están «esperanzados» con la negociación entre SanCor y Adecoagro.

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