Dairy exporter Fonterra Cooperative Group Ltd. has forecast a record farmgate milk price for its New Zealand suppliers due to resilient global demand and below-average growth in milk production.

The company, which is the world’s largest exporter of whole milk powder, said farmers could receive 8.40 New Zealand dollars ($6.02) per kilogram of milk solids for the 2021-2022 production season, up from its earlier midpoint forecast of NZ$8.00. In total, the payments would be nearly NZ$13 billion.

Demand from China has eased but other regions have kept overall demand firm, the company said Tuesday. Meanwhile, growth in global milk supply is likely to be below average, driven by a slowdown in U.S. production that stems from higher feed costs, it said.

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