Prices closer to $8.40 have more appeal, month-by-month analysis shows.
Fonterra has filled half of the total volume of its Fixed Milk Price offerings in the current season, as farmers have been selective in their applications month by month.
Only the April FMP offering of 30 million kg of milksolids was oversubscribed, at a net price of $8.41, and Fonterra accepted the 10% volume oversubscription.
Undersubscriptions in the other four monthly offerings ranged from just 15% in March to 61% in June.
Month-by-month comparisons show farmers have participated when the net offer prices have been around $8.40/kg but have not been attracted by prices closer to $8.
The results are:
March, 20m kg offered, $7.99 net price, 97 applications, 3m kg accepted.
April, 30m kg offered, $8.41 net price, 764 applications, 33m kg accepted.
May, 20m kg offered, $8.15 net price, 115 applications, 4.88m kg accepted.
June, 30m kg offered, $8.40 net price, 462 applications, 18.3m kg accepted.
July, 20m kg offered, $8.26 net price, 197 applications, 5.17m kg accepted.
Over five months of FMP events relevant to the 2025 dairy season Fonterra has offered a total of 120 million kg and farmers have taken up just over 64 mill lion kg.
The 40c spread between highest and lowest net prices (after the service fee of 10c is deducted) has been strongly indicative of farmers’ willingness to participate.
The offer prices, before the service fee, are set with reference to the SGX-NZX milk price futures market in three days following the first Global Dairy Trade event of each month.
At offer prices nearer $8 farmers seem willing to stay with the standard farmgate milk price forecast of $7.25 to $8.75, with a mid-point of $8.
The 6.9% fall in Global Dairy Trade commodity prices on July 2 did not prompt farmers to participate in greater numbers in the subsequent FMP.
Although the SGX-NZX futures market anticipated the big GDT price fall in dairy commodities, the milk price futures contracts level (MKPU25) stayed even around $8.30 (see graph).
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