Tuesday, 02 February 2016 12:35

Synlait drops forecast by 80c

Written by 
Synlait Milk chairman Graeme Milne. Synlait Milk chairman Graeme Milne.

Synlait Milk has dropped forecast milk price for the 2015 -16 season from $5/kgMS to $4.20/kgMS.

Chairman Graeme Milne says the revision is driven by the sustained low global commodity prices since September 2015, and a view that the recovery will be slower than anticipated.

"Our previous forecast of $5/ kgMS expected prices to recover somewhat by this stage in the season, however this hasn't happened and our revised forecast reflects this," says Milne.

"Similar to this time last year, there is still a lot of uncertainty. While our business is focused on value added products, global commodity pricing is the main driver behind the milk price that our suppliers receive.

"European milk production is high following the removal of quotas last year. Low oil prices mean cheap feed for farmers in Europe, USA and China while demand for imported dairy commodities by China, the world's largest importer, has declined as their local milk production has increased."

Milne says Synlait will continue to monitor the situation and expects to revise the forecast milk price again in May 2016.

Managing director and chief executive John Penno says there is no doubt this year will be very tough for dairy farmers, with two straight years of unsustainably low milk prices.

"It's important that we continue to give our suppliers a clear and realistic idea of where the milk price is likely to end up. As always things may change, and we hope they do because it's hard to run a dairy farm business in this environment," says Penno.

"More than half of our suppliers are now involved in our Lead With Pride and Special Milk programmes. Each programmme offers a premium payment over and above the Synlait base milk price for differentiating milk on farm."

"But it's still very tough out there. We're meeting with our suppliers in a few weeks to create a forum where their ideas and options around managing through this period can be shared. They're not alone and we're committed to supporting them where we can."

More like this

Synlait snag

OPINION: Canterbury milk processor Synlait's recovery seems to have hit another snag.

Synlait's back

OPINION: After years of financial turmoil, Canterbury milk processor Synlait is now back in business.

Wyeth to head Synlait

Former Westland Milk boss Richard Wyeth is taking over as chief executive of Canterbury milk processor Synlait from May 19.

Featured

Dr Mike Joy says sorry, escapes censure

Academic Dr Mike Joy and his employer, Victoria University of Wellington have apologised for his comments suggesting that dairy industry CEOs should be hanged for contributing towards nitrate poisoning of waterways.

People-first philosophy pays off

The team meeting at the Culverden Hotel was relaxed and open, despite being in the middle of calving when stress levels are at peak levels, especially in bitterly cold and wet conditions like today.

Farmer anger over Joy's social media post

A comment by outspoken academic Dr Mike Joy suggesting that dairy industry leaders should be hanged for nitrate contamination of drinking/groundwater has enraged farmers.

From Nelson to Dairy Research: Amy Toughey’s Journey

Driven by a lifelong passion for animals, Amy Toughey's journey from juggling three jobs with full-time study to working on cutting-edge dairy research trials shows what happens when hard work meets opportunity - and she's only just getting started.

National

Machinery & Products

JDLink Boost for NZ farms

Connectivity is widely recognised as one of the biggest challenges facing farmers, but it is now being overcome through the…

New generation Defender HD11

The all-new 2026 Can-Am Defender HD11 looks likely to raise the bar in the highly competitive side-by-side category.

» Latest Print Issues Online

Milking It

Buttery prize

OPINION: Westland Milk may have won the contract to supply butter to Costco NZ but Open Country Dairy is having…

Gene Bill rumours

OPINION: The Gene Technology Bill has divided the farming community with strong arguments on both the pros and cons of…

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter