The world’s biggest dairy exporter now expects to pay farmers between NZ$8.50 and NZ$9.50 per kilogram of milk solid (kgMS), compared with NZ$8.50 to NZ$10.00 per kgMS it forecast in August.

Chief Executive Officer Miles Hurrell said demand for whole milk powder has weakened, particularly in Greater China, offset by increased participation from other regions.

“We continue to feel the impact of geopolitical and macroeconomic events, with higher costs at every point in our supply chain,” Hurrell said.

Fonterra’s global milk supply from key exporting regions declined for the 12 months to September, while its New Zealand milk collections dropped 3% season-to-date.

The New Zealand dairy giant’s first-quarter earnings before interest and taxes rose to NZ$368 million ($234 million), compared to prior year’s NZ$190 million.

It upgraded its earnings guidance range to 50–70 New Zealand cents per share (cps) from 45-60 cps due to strong margins.

($1 = 1.5731 New Zealand dollars)