Updates with detail on forecast and CEO comments throughout
Feb 12 (Reuters) – New Zealand’s Fonterra FCG.NZ hiked its 2023-24 season’s forecast for farmgate milk price on Monday, citing strong global dairy prices and more demand in the Middle East and Southeast Asia.
The dairy company hiked the forecast range for its farmgate milk price – the price it pays to farmers for milk – to between NZ$7.30 and NZ$8.30 per kg of milk solids (kgMS) from its prior range of between NZ$7.00 and NZ$8.00 per kgMS.
“Recently, we’ve seen a lift in demand, primarily from the Middle East and South East Asia, for our reference commodity products and this has been reflected in GDT (Global Dairy Trade) prices,” Chief Executive Officer Miles Hurrell said.
Global dairy trade prices are up 10% since the company’s last farmgate milk price update in December, while whole milk prices are up over 11%, Hurrell said.
“Looking ahead, the potential impact of geopolitical instability and supply chain disruption on demand from key importing regions remains uncertain,” Hurrell added.
Fonterra reiterated its fiscal 2024 earnings guidance of 50-65 New Zealand cents per share unchanged.
(Reporting by Adwitiya Srivastava in Bengaluru; Editing by Andrew Cawthorne)
((Adwitiya.Srivastava@thomsonreuters.com;))
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