Synlait increases forecast milk payout

RNZ

Dairy company Synlait has increased its forecast payout for the current production of milk solids on the back of strong market prices.

The company is now forecasting a payout of $7.25 a kilogram of milk solids from its previous assessment of $7 a kilo.

Synlait chief executive Leon Clement said prices had been strong since the end of last year.

"We believe [they] will hold in the medium term as supply and demand continue to be evenly matched."

Rival Fonterra has a forecast of between $7.00 and $7.60 a kilo.

Analysts have raised their forecasts in recent weeks as recent dairy auctions have shown prices firming after a soft spot in the middle of last year.

The forecasts, if confirmed, would mean the best returns for dairy farmers since the record season of 2013/14, when farmers were paid more than $8 a kilo.

- RNZ