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Federated Farmers dairy chair Richard McIntyre.
A record $10/kgMS opening forecast milk price for the new season means more money into Fonterra farmers pockets early, says Federated Farmers dairy chair Richard McIntyre.
The co-operative last week announced a wide range forecast of $8 to $11/kgMS for the 2025-26 season, which kicked off June 1. However, Fonterra has settled for a forecast price above the midpoint of the forecast range.
Based on the $10/kgMS forecast, Fonterra farmers will get an advance rate of $7.50/kgMS for the first four months of the new season rising to $8.40/kgMS by May next year.
McIntyre told Rural News that the high advance rate would mean more money into farmers' pockets.
"This would improve cash flows; help farmers reduce bank debt and invest into farm machinery and maintenance," he says.
McIntyre says the record opening forecast milk price is also good news for the rural community.
"When dairy farmers do well, the benefits flow to the local communities and businesses."
Fonterra chief executive Miles Hurrell says they expect demand to continue for now but acknowledged the ongoing geopolitical uncertainty and the potential for a wider series of outcomes across the season.
Fonterra also reaffirmed a milk price of $10/kgMS for the season that's just ended.
OPINION: There is zero chance that someone who joined Fonterra as a lobbyist, then served as a general manager of Fonterra's nutrient management programme, and sat on the board of Export NZ, a division of lobbyist group Business New Zealand, doesn't understand that local butter (and milk and cheese) prices are set by the international commodity price.
Kiwis love their butter, and that's great because New Zealand produces some of the best butter in the world. But when the price of butter goes up, it's tough for some, particularly when many other grocery staples have also gone up and the heat goes on co-operative Fonterra, the country's main butter maker. Here the co-op explains why butter prices are so high right now.
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