23 Feb 2017

Fonterra sticks to $6 payout forecast

9:03 am on 23 February 2017

Fonterra has confirmed its forecast farm gate milk price for the current season of $6 a kilogram of milk solids.

Fonterra milk truck picking up Simon Mackle's milk.

Fonterra had raised its forecast payout in November and said the market had stayed relatively balanced since then. Photo: RNZ / Rebekah Parsons-King

The co-operative raised its forecast by 75 cents in November following several strong global dairy auctions.

In the past year milk prices have risen nearly 50 percent overall, driven by an almost 70 percent increase in whole milk powder prices.

Last season farmers were paid $3.90 a kilogram of milk solids.

Fonterra chair John Wilson said the global market for commodity dairy products has stayed relatively balanced since November and he expected that to continue.

Under the Dairy Industry Restructuring Act, the co-operative is required to consider its forecast every quarter.