Fonterra announces new season farmgate price of $7/kg

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Fonterra has pitched its opening farmgate milk price for the 2018/19 season at $7.00 per kg of milksolids – one of its highest yet – and upgraded its milk price for the current season by 20c a kg.

If its forecast comes to pass, it will be the fourth time since Fonterra was established in 2001 that its milk price hit $7.00/kg or more.

However, milk is Fonterra’s biggest input cost, so that will have a negative impact on the company’s earnings and its dividend.

Fonterra increased its 2017/18 forecast for the current season, which ends on May 31, at $6.75 per kg, up 20c from the previous forecast.