Fonterra Australia announced an opening price of $5.85 per kilogram of milk solids (kgMS) on Thursday and upgraded its forecast closing range to $5.85 to $6.20kgMS for season 2018/19.
Fonterra Australia managing director René Dedoncker said this price reflected what the company could earn in the market, as Fonterra continues to optimise its assets, strengthen its strategic partnerships, improve its product mix, and drive greater returns from domestic and global markets.
The company also announced a step up for its 2017-18 price to $5.68/kg MS, plus $0.40/kg MS, paid as a refund for the price stepdown in 2015-16Fonterra for a total cash payout and forecast average closing milk price of $6.08/kgMS.
The increase will apply from 1 July 2017 and will be paid on July 15.
“Our opening and upgraded forecast closing range are based on a continued positive global supply and demand outlook, coupled with more favourable currency movements," Mr Dedoncker said.
"Demand is expected to remain strong – especially from China for milk powders and Japan for cheese, as well as butter and AMF (anhydrous milk fat) globally – and the global dairy market’s current strong prices are expected to continue throughout the new season.
“Since our last price review, we have achieved positive sales in key cheese export markets, GDT (Global Dairy Trade) remains at supportive levels, and the short-term weakness in the Australian dollar has given us confidence to update our forecast closing range.