The cooperative previously lowered its forecast dividend to 15-20 cents per share in May as rising milk prices squeezed margins, from an earlier projected payment of 25-35 cents per share. Fonterra also trimmed its 2017/18 forecast farmgate milk price to $6.70 per kilogram of milk solids from $6.75/kgMS. In May, Fonterra raised the milk price 20 cents to $6.75/kgMS and gave the bullish opening forecast for 2019 due to strong global demand for dairy products. Prices were steady at this week's Global Dairy Trade auction, and AgriHQ analyst Amy Castleton noted strong short-term demand for whole milk powder. "You never want to have to reduce the milk price at season's end, but it is the right thing to do and $6.70 remains a strong milk price," Monaghan said.

Source: Otago Daily Times August 09, 2018 23:03 UTC