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Fonterra new season forecast lower than expected

Author
Gia Garrick,
Publish Date
Thu, 26 May 2016, 9:13AM
Fonterra's new season forecast is $4.25(Getty Images).

Fonterra new season forecast lower than expected

Author
Gia Garrick,
Publish Date
Thu, 26 May 2016, 9:13AM

UPDATED: 10.51am Fonterra's new season forecast's out - at $4.25.

It's the forecast for the farmgate milk price for the coming 2016-17 season.

LISTEN ABOVE: Brent Love talks to Rachel Smalley

ASB rural economist Nathan Penny said the figure is a little lower than expected.

"We were thinking more towards the higher end of $4 but Fonterra's started the year conservatively with a $4.25 milk price forecast."

But he said farmers know they're in an uphill battle.

"Still a long way to go to get back to something where they can start making money again, so still tough times ahead on the farm."

Federated Farmers Southland president Allan Baird said there could be a number of reasons the forecast isn't higher.

"There's still a lot of product being produced by Europe and America. Global economy is still reasonably fragile so a lot of things happening."

KPMG agribusiness specialist Brent Love told Rachel Smalley any rise, however small, will mean optimism in the sector.

"What farmers are going to be really interested in, is what they are going to get as an advance, because that's what they will be paid on the 20th of July when those first calves start turning up."

The current season ends in a few days, with the payout remaining $3.90 per kg.

 

 

 

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