28 May 2014
Fonterra's milk price forecast for 2014-15 above expectations
FXStreet (Bali) - Fonterra cut its forecast milk price for this year to $8.40 per kilogramme of milk solids vs $8.65 previous, while forecast for the 2014/15 season is projected at $7, which comes slightly higher than consensus.
Cited by Interest.co.nz, Westpac senior economist Anne Boniface said at $7 is "probably a touch stronger" than the market had been expecting, though "very consistent with our own milk price forecast which sits at $7.10".
Boniface adds: "Despite the more positive tone to today's release than many had been braced for, there's no denying that dairy farmer's cash flows in the 2014/15 season will be well down on the current season. However, this is unlikely to come as a surprise to many farmers, who by and large seem to have been taking a relatively cautious approach to the very strong revenue growth this season. Many have opted to use additional cash flow to reduce debt."
According to ANZ: "On a historical basis a milk price above $7/kg MS is still very good, and ensures decent profitability around the $2,000/ha mark for the average dairy farmer."
Cited by Interest.co.nz, Westpac senior economist Anne Boniface said at $7 is "probably a touch stronger" than the market had been expecting, though "very consistent with our own milk price forecast which sits at $7.10".
Boniface adds: "Despite the more positive tone to today's release than many had been braced for, there's no denying that dairy farmer's cash flows in the 2014/15 season will be well down on the current season. However, this is unlikely to come as a surprise to many farmers, who by and large seem to have been taking a relatively cautious approach to the very strong revenue growth this season. Many have opted to use additional cash flow to reduce debt."
According to ANZ: "On a historical basis a milk price above $7/kg MS is still very good, and ensures decent profitability around the $2,000/ha mark for the average dairy farmer."