Fonterra Co-operative Group Ltd has announced a significant update to its forecast for the 2024/25 season, raising the Farmgate Milk Price midpoint by 50 cents to $8.50 per kgMS.
This revision reflects improved Global Dairy Trade (GDT) prices and the cooperative's robust financial position. Additionally, Fonterra has adjusted the FY25 Advance Rate Schedule, ensuring farmers receive higher payments earlier in the season.
"Since announcing our opening FY25 season forecast Farmgate Milk Price in May, GDT prices have improved. We've reflected this in our revised forecast range, with our midpoint lifting 50 cents to $8.50 per kgMS," said Fonterra CEO Miles Hurrell.
He emphasised that while it's still early in the season, with only a small portion of the sales book contracted, the new forecast range is now set at $7.75-$9.25 per kgMS, up from $7.25-$8.75 per kgMS.
Hurrell also highlighted the cooperative's strong balance sheet, which has enabled enhancements to the Advance Rate payment schedule.
"The adjustments announced today will see farmers paid 10% more of the FY25 forecast Farmgate Milk Price from December, assisting farmers with on-farm cash flow," he said.
In addition to the milk price update, Fonterra also provided an update on its FY24 earnings. The cooperative expects its earnings from continuing operations to be at the top end of its previously announced range of 60-70 cents per share.
"As we look to close out the books for the year, it's become clear that we have maintained strong performance across FY24. We're on track for a strong full-year dividend," Hurrell noted.
Final FY24 earnings and the full-year dividend will be confirmed when Fonterra reports its financial results in September, following the finalisation of its financial statements and audit.
