- Dairy specialist Fonterra (FSF) lifts its Farmgate milk price forecast for the 2022/23 season to between NZ$8.75 and NZ$10.25 (A$7.94 and A$9.30) per kilogram of milk solid (kgMS)
- The company attributes the price increase to the current global milk supply and demand picture and a strong US Dollar
- Meanwhile, Fonterra announces a 2023 financial year earnings guidance of between 30 and 45 New Zealand cents per share, reflecting a recovery in some key markets
- This comes as the company undergoes some corporate changes by appointing two new executive roles and merging its AMENA and APAC international business arms
- Shares in Fonterra last traded at $2.90 on June 22.
New Zealand-based dairy specialist Fonterra (FSF) has lifted its Farmgate milk price forecast for the 2022/23 season to between NZ$8.75 and NZ$10.25 (A$7.94 and A$9.30) per kilogram of milk solid (kgMS).
This marks a 50-cent increase from the company’s initial forecast for the new season of between NZ$8.25 and NZ$9.50 per kgMS, and it increases the midpoint of the range — off which farmers are paid — to NZ$9.50.
The company attributed the increase in its milk price forecast to the current global milk supply and demand picture and strong US Dollar.
Meanwhile, the company also announced its 2023 financial year earnings guidance range of between 30 and 45 New Zealand cents per share.
Fonterra CEO Miles Hurrell said this “strong” earnings guidance reflected an expected recovery in some of the company’s key markets which experienced margin pressures in the 2022 financial year.
“The wide earnings range for 2022/23 reflects the current high level of uncertainty that comes with operating in a globally-traded, volatile market,” Mr Hurrell said.
“While the Co-op is in the position to be forecasting both solid earnings and a healthy milk price for the next year, significant volatility remains.”
He said near-term headwinds, like rising interest rates and high inflation, had the potential to impact some of the company’s targets.
Nevertheless, Mr Hurrell maintained that the fundamentals for the dairy market looked strong through to 2030.
FSF corporate shuffle
As Fonterra works towards its long-term growth plan out to 2030, announced in September last year, the dairy business has appointed Komal Mistry-Mehta as its Chief Innovation and Brand Officer.
Ms Mistry-Mehta currently leads FSF’s Active Living business arm.
The company said it was also looking to appoint a new Managing Director for Strategy and Optimisation.
Meanwhile, Fonterra has merged its Africa, Middle East, Europe, North Asia and the Americas (AMENA) arm with its Asia Pacific (APAC) arm to form one business unit under the leadership of the current APAC CEO, Judith Swales.
The new Fonterra roles will be effective from August 1, with the new business unit to be effective from October 1.
Shares in Fonterra last traded at $2.90 on June 22.