Fonterra (ASX:FSF) has this morning announced it is increasing its forecast farmgate milk price range from $6.25 - $7.25 per kgMS to $6.55 - $7.55 per kgMS.
Fonterra Chairman John Monaghan says the Co-op had been achieving good prices for its milk so far this season.
Demand for whole milk powder (WMP) has been firm, and for the full season Fonterra is expecting it to be above last year. Global WMP production is down year to date and expected to continue to decrease for the remainder of 2019.
The dairy company says its earnings outlook for FY20 is based on a forecast Farmgate Milk Price, which still falls within its new forecast range of $6.55 - $7.55 per kgMS. The mid-point of the revised range does mean its teams will need to continue to push hard to achieve its margins, but so far the business is comfortable with how the season is shaping up in terms of underlying business performance.
Shares in Fonterra (ASX:FSF) closed 1.73 per cent lower at $3.685 yesterday.