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Source: ONE News -
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Fonterra has increased its forecast for the 2009/10 season to $5.10 per kilogram of milk solids.
This is a significant upwards revision on its previous forecast in May of $4.55 per kilogram.
Fonterra chairman Henry van der Heyden says the 55-cent lift reflects a sustained improvement in commodity returns and a more positive outlook in international dairy markets.
This changing outlook has been reflected in the price of whole milk powder on the co-operative's monthly online auctions. Over the past two months prices have jumped nearly 50%, with an average price of $US2,858 per tonne paid in its latest trading event in early September.
"Whole milk powder prices have been leading the way, with the prices for other dairy commodities now all moving in the right direction," says Fonterra CEO Andrew Ferrier.
Van der Heyden says concern remains over the high Kiwi dollar which is currently trading between 70 and 71 US cents, but he says this has been factored into the revised forecast.
"We've had really tight cash flows on farms going into this season, and some serious belt tightening to get through. This will give our farmers a bit of relief and some extra flexibility to get the best out of their farms this year," he says.
Fonterra Shareholders' Council chairman Blue Reid says the lift has come at a time when farmers can benefit from a rise in payout.
"Receiving this signal relatively early on should help our farmers to plan their farm operations with confidence for the rest of the season," he says.
Fonterra on Friday announced its
capital restructure proposal and on Wednesday will
release its 2008/09 financial results and confirm its payout for
the 2008/09 season on Wednesday.
