Big dairy processor sets 2017/18 forecast well above $6

Open Country is 76 per cent owned by agribusiness group Talley's. Photo / File

Open Country Dairy, New Zealand's second biggest dairy processor after Fonterra, has set its opening forecast for the coming 2017/18 season at $6.25 to $6.55 per kg of milksolids.

The forecast compares with Open Country's range of $5.70-$6/kg for the current season, which ends on May 31. Fonterra, which has forecast $6.00/kg for the current season, has yet to issue its forecast for next season.

"We have seen the market recover over the past few months and stability return as supply and demand have come more into balance," Open Country said.

"Our expectation is that the market balance will be maintained throughout the new season," the company said. "This is reflected in the slight variations throughout each of the settlement periods. Most economic forecasters share a similar view, which provides further confidence to our forecast, and which no doubt provides some relief to everyone in the industry."

ANZ rural economist Con Williams said it was a "confident" forecast for the start of the season.

"A milk price in the mid $6s looks a pretty strong forecast in the current environment, but that's not to say that it won't be achievable," he said.

Open Country is 76 per cent owned by agribusiness group Talley's.