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ASB head of rural banking Aidan Gent is encouraging farmers to speak to their banks when they are struggling.
Fonterra last week lifted its earning guidance for this season but narrowed its forecast farmgate milk price due to softening whole milk powder prices.
The co-op's new earnings guidance is 50-70c/share, up from 45-60c. However, its forecast farmgate milk price range drops from $8.50-$10/kgMS to $8.50-$9.50/kgMS.
The new midpoint for the forecast milk price is $9/kgMS, a drop of 25c, but the co-op is holding its advance rate paid to farmers monthly for milk.
Fonterra chief executive Miles Hurell says it was a positive start to the year given the current global operating environment.
"We continue to feel the impact of geopolitical and macroeconomic events, with higher costs at every point in our supply chain.
"It's a similar story behind the farm gate with our farmer shareholders managing significantly higher input costs."
The co-op reports that globally, milk supply from key exporting regions is down over the last 12 months.
Production in Europe and Australia continues to be down, with US milk supply showing a slight improvement in recent months. In New Zealand, Fonterra's milk production is down 2.9% on the same point last season.
"Global market volatility has prompted some softening of demand for whole milk powder, particularly in Greater China, and this is reflected in our forecast farmgate milk price range," says Hurrell.
"We've seen increased participation from other regions, which has offset in part the drop in demand from Greater China. While it's still early in the financial year, we are happy with our sales contract rate."
Hurrell says the long-term outlook for dairy remains strong.
"There's no doubt that we're in a period of increased global uncertainty.
"Inflationary pressures are bing felt both on farm and across our business but looking further out, the fundamentals for dairy remain positive."
New Zealand dairy processors are welcoming the Government’s commitment to continuing to push for Canada to honour its trade commitments.
An educational programme, set up by Beef + Land New Zealand, to connect farmers virtually with primary and intermediate school students has reported the successful completion of its second year.
The Food and Agriculture Organisation of the United Nations (FAO) has welcomed a resolution adopted by the United Nations (UN) General Assembly to declare 2026 International Year of the Woman Farmer.
Waikato herd health veterinarian Katrina Roberts is the 2024 Fonterra Dairy Woman of the Year.
Trade Minister Todd McClay says New Zealand has no intention of backing down in a trade dispute with Canada over dairy products.
Horticulture NZ chief executive Nadine Tunley will step down in August.
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