28 Jan 2019

Synlait Milk reduces forecast milk payout

1:40 pm on 28 January 2019

Canterbury based Synlait Milk has reduced its forecast milk payout for the current season.

Milk in glass jug.

Photo: 123rf

In an announcement today, the specialty dairy producer, which has about 200 farmer suppliers, said it now expected to pay $6.25 per kilogram of milk solids, 50 cents lower than its previous forecast.

Dairy giant, Fontana, made a similar move in December, lowering its forecast milk price payout to a range of between $6.00 and $6.30 a kilogram of milk solids.

Sunlight's chief executive, Leon Clement, said until recently commodity prices had been declining for some time.

"This is in part due to global demand reacting to very strong production from New Zealand carrying into summer, alongside expectations of better production growth out of the Northern Hemisphere," he said.

Mr Clement said the company had signaled that the forecast price of $6.25 kg MS was dependent on commodity prices continuing to recover for the rest of the season, but this was considered realistic.

"Our milk suppliers will not be surprised by this change as we communicate openly with them about the fluctuations in global pricing on a regular basis," he said.

Synlait's next milk price update for the 2018/2019 season will be in May.