NZ Milk Price Gapdown: Fonterra Slashes Farmgate Milk Price to $3.85
August 6th, 2015Break even price for many farmers: $5.70.
Via: NZ Herald:
Fonterra – New Zealand’s biggest exporter – has lowered its farmgate milk price for 2015/6 to $3.85 a kg of milksolids, down from a previous forecast of $5.25 a kg.
The co-op said its forecast total payout for the 2015/6 season would be $4.25-$4.35 a kg, comprising the revised farmgate milk price and earnings per share of 40 to 50 cents, down from the previous year’s record payout of $8.50 a kg.
The lower farmgate milk price follows sharp falls in whole milk powder prices, which have plummeted by 51.4 per cent on Fotnerra’s GlobalDairyTrade platform since March this year.
Agriculture information provider, AgriHQ, estimates that a $1/kg drop in the milk price equates to about $2 billion less income for dairy farmers.
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A price around $5.70 is regarded as breakeven for many farmers. Those with high debt from converting other farms to dairy are more vulnerable but banks have said they are working closely with them to avoid problems.
