Positive customer demand and ongoing supply constraints underpin $12.30/kg MS outlook.
A strong outlook in the organics sector has seen Fonterra announce a record $12.30/kg MS midpoint forecast for its organic farmers for the new dairy season.
The forecast has a range of $11.30-$13.30/kg MS, reflecting the uncertainty around forecasting this far out from the end of the season, Fonterra group director farm source Anne Douglas said in an email to the co-operative’s organic suppliers on May 29.
Fonterra also lifted its forecast range the 2024-2025 season to $11.70-$12.30/kg MS with a midpoint of $12/kg MS.
This is up from the forecast midpoint of $11.80/kg MS announced in February.
That lift has largely been driven by higher sales returns across all products off the back of strong demand, Douglas said.
“Our financial year 2025 full-year sales forecast is up by 25% compared to last year based on milk solids, and we’re continuing to see encouraging growth in the number of new sales leads.”
Douglas said the new season’s forecast showed that the fundamentals of its organics business are strong.
“Overall, we’re seeing positive customer demand coupled with ongoing constrained supply, particularly across the United States. We plan to make the most of these favourable market conditions while also keeping a close eye on potential risks that could impact our business.”
Fonterra has over 100 organic suppliers, situated mostly in the North Island with supply growing at 2-3% a year.
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