Dairy cooperative Fonterra has cut its forecast payout range for the current season by 30 cents, representing a total drop of around NZ$500m (US$374.7m).
The dairy co-operative announced yesterday (22 May) that it had revised down its 2011-12 forecast payout range before retentions to NZ$6.45-NZ$6.55, blaming softening dairy prices on the commodities markets for the fall.
Fonterra also announced a lower opening forecast payout range for the 2012-13 season starting on 1 June of $5.95-$6.05.
This price reflects the board’s “realistic outlook” on the prospects for global dairy markets over the coming season, chairman Sir Henry van der Heyden said.
“There’s a lot of milk out there and prices have softened. We think that supply and demand should move more into balance later in 2012, which may help ease the downward pressure on prices,” he commented.
The GlobalDairyTrade trade-weighted index had declined 20.3% since Fonterra’s last forecast of $6.35 in April, chief executive Theo Spierings added.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataHigher global dairy production – particularly in the US, Europe and New Zealand – was pushing down international dairy prices, Spierings said.