Fonterra's made a late change to its forecast milk price for farmer shareholders for the season that ended in May. And it's good news.
The forecast has been raised from an expected $10 per kilogram of milk solids to $10.15 per kgMS. It was already going to be a record. Now it's going to be a bigger record.
Fonterra expresses its forecasts these days through a 'range' of prices - but the 'midpoint' of the range is what's paid attention to. Previously the 'range' for the 2024-25 season had been $9.70 to $10.30 - giving a midpoint of $10.
Now, however, its been narrowed and effectively raised, with the range, now $10.10 to $10.20, giving the new midpoint of $10.15.
Fonterra chief executive Miles Hurrell said the co-operative had begun the season with a wide forecast range to account for potential volatility in commodity prices and exchange rates resulting from "geopolitical dynamics".
"However, Global Dairy Trade prices have remained stable, and when coupled with our well contracted sales book, we have been able to increase our forecast Farmgate Milk Price across the season," he said.
Fonterra will confirm the final milk price for the season when it releases in financial results for the 2025 year next month.
Fonterra has also retained the $10.00 per kgMS forecast for the current 2025-26 season and narrowed the range from $8.00 - $11.00 per kgMS to $9.00 - $11.00 per kgMS.
"Global Dairy Trade prices continue to be strong, supporting the $10.00 per kgMS forecast midpoint for the current season," Hurrell said.
"However, it’s still early in the season and the risk of volatility remains, which is reflected in the wide forecast range,."
Fonterra's 2025 full-year forecast earnings of 65-75 cents per share remain unchanged.
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