Fonterra cuts milk price forecast to $9.25/kg mid point

Fonterra has cut its farmgate milk price for the current year. Photo / Supplied

Fonterra has cut its milk price forecast for the current year due to falling global dairy prices.

The co-op's forecast has been revised from $8.75-$10.25 per kg of milksolids to NZ$8.50-$10.00 per kg.

This reduces the midpoint of the range from $9.50 to $9.25 per kg but the current advance payment rate of $5.70 per kg is unchanged, Fonterra said.

Chief executive Miles Hurrell said the revision would be disappointing for the co-op's farmers.

He said it reflected several factors, including the recent downward trend in global dairy prices driven by some short-term softening in global demand, and the general impact of inflation on purchasing behaviour.

"However, we believe the longer-term outlook for dairy remains positive," he said.

Fonterra's financial results for the July 31 year will be released on September 22.