Fonterra Cooperative Group is expected to lift its farmgate milk price payout to farmers after a further gain in global dairy auction prices overnight.
New Zealand’s dominant milk processor hiked its milk price forecast last month to $6 per kilogram of milk solids for the current season, compared with $3.90/kgMS last season, and analysts in a BusinessDesk survey expect it will raise the price further as dairy prices continue to lift on the GlobalDairyTrade auction platform. Analysts are now expecting the payout to be between $6 and $6.50/kgMS.
Prices for whole milk powder, New Zealand’s key commodity export, increased 4.9 percent to US$3,593 a tonne at the latest GlobalDairyTrade auction overnight, taking the gain since early July to 74 percent. Prices have now risen above the level needed for most dairy farmers to break even, following two consecutive seasons of losses, amid lower supply.