Fonterra has announced a new forecast payout for the new season in the range of $8.75 to $10.25/kg milk solids, with the mid-point increased by 50 cents to $9.50/kg. The company says its decision reflects continued constrained milk supply and the strength of the US dollar – the exchange currency for dairy transactions. CEO Miles Hurrell has warned of considerable volatility affecting its longer term outlook. “A series of global events has changed some of our assumptions.  ”In particular, interest rates and inflation have lifted well above our assumptions, as have commodity prices in response to the continued strong demand for dairy. “These near-term headwinds have the potential to impact some of the co-op’s targets”.

This post was originally published on, written by Barry Wilson’s Dairy Industry Newsletter.