The co-operative's forecast midpoint has moved up from $9.25/kgMS to $9.50/kgMS.
Alongside the higher midpoint, Fonterra has also lifted and narrowed its forecast range, from $8.00-$10.50/kgMS to $8.50-$10.50/kgMS, signalling more confidence at the lower end of the rangee while keeping the top of the range unchanged.
Why The Forecast Improved
Fonterra chief executive Richard Allen says the upgrade reflects a stronger run of Global Dairy Trade (GDT) auction results since the co-operative's last update in July.
Whole milk powder and skim milk powder - two of the most important products for New Zealand's dairy export mix - have both improved at recent auctions.
"Globally, we continue to see strength in demand," Allen says, pointing to sustained buyer interest as a key factor supporting the higher forecast.
He also credits the co-operative's performance, noting that the improving outlook reflects continued delivery from Fonterra's focused execution across its business-to-business operations.
A Note of Caution
Despite the upgrade, Allen is careful not to overstate the certainty of the outlook.
With only two months of the season complete, he says history shows conditions can shift quickly.
Geopolitical volatility also remains a live risk factor that could influence commodity prices and demand over the rest of the season.
