Rises in the Global Dairy Trade Auction have led dairy giant Fonterra to lift its farm gate milk price. Photo: RNZ / Rebekah Parsons-King
Recent lifts at the Global Dairy Trade Auction have led dairy giant Fonterra to lift its farm gate milk price forecast for the current season.
It's up 50 cents to $8.50 per kilogram of milk solids.
However, Fonterra said it was still early in the new season, and it was maintaining a broad forecast range of $7-75 to $9-25 per kilo.
The average price at GDT lifted 5.5 percent on Wednesday to US$3920/tonne, (NZ$6495/tonne) while the whole milk powder price which strongly influences the payout for local farmers rose 7.2 percent to US$3482/tonne.
Alongside the lift in milk price forecast, Fonterra lifted its advance rate schedule and advised its FY24 earnings were forecast to be at the top end of the announced range of 60-70c/share.
Chief executive Miles Hurrell said the increase would see farmers paid more for their milk earlier in the season.
"The adjustments announced today will see farmers paid 10 percent more of the FY25 forecast Farmgate Milk Price from December paid January compared to other seasons, assisting farmers with on-farm cash flow.
"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.
The Co-op would confirm its final FY24 earnings and full year dividend when it reports its financial results in September.