Although the latest Global Dairy Trade auction result was "very good" it was also "inline with expectations" says Marc Rivers.

Dairy prices rose by 1.7 per cent at this morning's Global Dairy Trade auction, with whole milk powder prices up by 2.4 per cent.

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Fonterra's Chief Financial Officer remained coy however, when The Country's Jamie Mackay asked if this was leading to the $8.00/kg milk price, as predicted by ASB senior rural economist Nathan Penny.

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"We've got a range out there. Of course we've got the mid point of the range and we'll see if our view changes and we'll come out with a new view, but for now that's still a good range that we've got".

It all came down to supply and demand said Rivers.

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"What's really good to see is very robust demand out there for our products, but on the other side it's also what will happen on the supply side as Europe starts to enter their spring ... at the moment we're seeing it's a really good balance right now".

Global environmental constraints also had a part to play, and although there were currently "attractive prices out there", New Zealand's dairy industry had to "wait and see" what the responses might be said Rivers.

Fonterra's Chief Financial Officer Marc Rivers. Photo / Dean Purcell
Fonterra's Chief Financial Officer Marc Rivers. Photo / Dean Purcell

Fonterra's outlook remained unchanged on seasonal volumes in New Zealand, despite dry conditions around the country said Rivers.

"We're assuming 1530 [million kgMS] for the full year which is slightly up from last season - we had 1520 [million kgMS] last season - so we're sticking to that as the outlook".

Although Fonterra wanted to "do well on all fronts", Rivers agreed with Mackay that the most important result for dairy farmers and New Zealand's economy was the milk price.

"Absolutely to the New Zealand economy, to the farmers what's most important is the milk price, so these are very good conditions for us overall".

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