Farmgate Milk Price a 'good news story' for Fonterra farmers

Fonterra has reaffirmed its forecast farmgate milk price range at $7.00-7.60 per kgMS, which is a "good news story" for its farmers says Miles Hurrell.

"To reaffirm our $7 to $7.60 at this point [we're] really pleased with that" Fonterra's chief executive told The Country's Jamie Mackay.

Hurrell said the price range reflected how milk was seen as a "staple food", despite "some softening" in the last couple of Global Dairy Trade events.

Although there were "a few clouds on the horizon" to watch for, "at this stage we're very, very comfortable with that $7 to $7.60" said Hurrell.

Fonterra has also revised its forecast milk collections for the 2020 season, down from 1,530 million kgMS to 1,515 million kgMS, a drop which Mackay was expecting to be more significant due to drought conditions.

Hurrell put the small decline down to a "pretty good spring" last year and the fact that 80 per cent of the co-op's milk was collected around the end of February.

"While there's some tough farm conditions, certainly in the North Island now, and we had the floods in the south, we're seeing milk up in the last couple of months in the South Island two or three per cent so things are in good shape down there from a milk collection perspective."

However Hurrell said he was expecting some softening as the last 20 per cent of milk collection "plays out", due to the dry starting to bite in Northland, Waikato and the Lower North Island, but he remained confident.

"It's coming back but not to extent that some people see or feel when look outside their windows of their farms right now."

Also in today's interview: Hurrell talked about how coronavirus was affecting Fonterra's operations in China and discussed the exchange rate.