Synlait forecasts $7 a kg base price

Synlait Milk has announced an opening forecast base milk price of $7 a kilogram of milk solids for the new dairy season.

Yesterday, the Canterbury milk processor also announced its forecast base milk price for the 2018-19 season had increased from $6.25 to $6.40.

In a statement, chief executive Leon Clement said the increase was due to recovering dairy commodity prices since the company's last update in January.

"We've seen steady improvements in prices since the start of December, recovering a lot of the ground lost earlier in the season,'' he said.

While Synlait was positive about pricing for the 2019-20 season, it acknowledged the $7 forecast relied on pricing remaining robust throughout the season.

"We think that's realistic, in the light of the current slowdown in world supply and strong demand from our key markets.

"But, as always, these forecasts are based on the best information available to us and we are recommending that our farmers remain cautious in the face of geopolitical and economic uncertainties,'' he said.

Synlait's final milk price for the 2018-19 season would be confirmed alongside its annual result announcement in early September.

The 2019-20 season forecast would also be updated at that time.

Last week, Fonterra narrowed its 2018-19 farm-gate milk price forecast range by 20c from $6.30-$6.60 to $6.30-$6.40 and provided a 2019-20 opening season forecast of $6.25-$7.25.

 

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