Fonterra Co-operative Group Ltd today increased its forecast Farmgate Milk Price and earnings guidance for FY24 following a strong start to the year. 

The forecast Farmgate Milk Price midpoint for the 2023/24 season is up 25 cents to $7.50 per kgMS, with the forecast range moving from $6.50 - $8.00 per kgMS to $7.00-$8.00 per kgMS. 

Fonterra CEO Miles Hurrell says the revised forecast reflects recent strengthening in demand for reference commodity products from key importing regions, including improvement in demand from China during the first quarter.  

“Global Dairy Trade prices have lifted, and our sales book is also well contracted for this time of year, giving us confidence to increase our forecast Farmgate Milk Price. 

“It’s still early in the year, with potential for further volatility in commodity prices, so we will continue to watch market dynamics closely and provide updates as needed,” says Mr Hurrell. 

The Co-op also reported strong earnings for the first quarter due to improved performance in all three of its sales channels.  

“As a result, we have lifted the midpoint of our forecast earnings for the year up 5 cents per share, with the range moving from 45-60 cents per share to 50-65 cents per share,” says Mr Hurrell.  

This news makes the shortfall smaller than previously forecast in a lot of cash flow budgets. T

The payout from Westland Milk (which is tied to the median milk price forecast from Fonterra) will increase to $6.46/ kg MS on the 20th of December.