Friday 7 August 2015

Milk prices slashed by Fonterra

This is what has been feared. Prices for milk solids have halved from what they were a year ago taking them below the price of production.  

Farmers and government will resort to hopium saying that the prices will recover. They won't - not in a hurry. All commodities - except those in short supply because of climate change - are crashing.

Farmers will be forced off the and.There will be farmer suicides as a result of this.

John Key's self-proclaimed "Rockstar economy" is in tatters

Fonterra slashes farmgate milk price to $3.85
Fonterra has cut its forecast farmgate milk price payout to dairy farmers this season to $3.85, down from $5.25 forecast earlier in the year.


Fonterra has announced Fonterra Co-operative Support will add an additional 50 cents per shared-up kilogram of milksolids to support farmers this season. Photograph by Alan Gibson.

7 August, 2015 15.43 NZT


Fonterra has announced that the forecast total payout available to farmers in the 2015/16 season will be $4.25-$4.35.

That comprises a forecast Farmgate Milk Price of $3.85 per kilogram of milksolids and forecast earnings per share in the range of 40 - 50 cents per share.

Fonterra has also announced Fonterra Co-operative Support of an additional 50 cents per shared-up kilogram of milksolids to support farmers this season.

Chairman John Wilson said the Farmgate Milk Price forecast has been reduced from $5.25 kgMS to $3.85 per kgMS due to the continued significant imbalance in the global dairy market between weak demand and surplus supply.

"This imbalance and the challenge of lower prices continuing for longer than anticipated is a global issue, which dairy farmers around the world are increasingly grappling with," Mr Wilson said.

"Current prices are unsustainably low and we are seeing them beginning to impact production levels globally. We have confidence that prices will recover over the course of the season. However, it will be a tough season for our farmers.

"The range of possible scenarios is contributing to the uncertainty we are seeing today.

"We know the global dairy market will improve. The hard thing to call at the moment is exactly when and how quickly," said Mr Wilson.

See the full announcement here:

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