Fonterra shaves 50c off forecast milk price
Fonterra has dropped its forecast milk price mid-point by 50c as a surge in global milk production is putting downward pressure on commodity prices.
The GDT price index fell 3.5%, compared to the previous auction. Whole milk powder price, the main tool used by Fonterra to determine its farm gate milk price, was down 1.8% to US$2599/metric tonne.
The WMP price has failed to rise in nine consecutive GDT auctions and is at a two-year low.
Fonterra is required to give a milk price forecast for Dairy Industry Restructuring Act (DIRA) purposes by 15 December 2018.
On August 31, the co-op revised its 2018/19 forecast farm gate milk price from $7.00/kgMS to $6.75/kgMS.
However, available market information forced the co-op to lower the forecast milk price even further on October 10. The co-op slashed its milk price from $6.75/kgMS to a range of $6.25 to $6.50.
Key results
AMF index down 9.4%, average price US$4,577/MT
Butter index down 9.6%, average price US$3,637/MT
BMP not offered
Ched index up 0.2%, average price US$3,252/MT
LAC index up 1.1%, average price US$920/MT
RenCas index down 4.5%, average price US$5,067/MT
SMP index down 1.6%, average price US$1,965/MT
SWP index not available, average price not available
WMP index down 1.8%, average price US$2,599/MT
