NZ's Fonterra cuts milk collection, price outlook for 2022/23

 The world's biggest dairy exporter now expects to pay farmers for milk supply between NZ$8.20 and NZ$8.80 per kilogram of milk solid (kgMS), compared to an earlier estimate of NZ$8.50 to NZ$9.50 per kgMS. 

"Demand for whole milk powder, particularly from Greater China, has been soft with prices down around 5% since the beginning of December," said Chief Executive Officer Miles Hurrell.

On milk production, Hurrell said headwinds from cyclone Gabrielle and dry conditions in the country's South Island were impacting co-operative's full season aspirations.

For the 2022/23 season, Fonterra now expects milk collection at 1,465 million kgMS, down from its previous forecast of 1,480 million kgMS. The group recorded milk collection of 1,478 million kgMS for the year ended July 31, 2022.

Peer a2 Milk Co, during its earnings show on Monday, also flagged "increasingly challenging" headwinds in the China infant milk formula market which are likely to continue on account of declining birth rates in Asia's largest economy.