Fonterra increases 2009/10 milk price forecast

Fonterra has announced an increase of 40 cents, to $6.10 per kilogram of milk solids (kgMS), in its forecast milk price for the current 2009/10 season.

The co-operative also maintained its forecast range for the 2009/10 distributable profit of 40-50 cents per share.

Fonterra’s target dividend range is also unchanged at 20-30 cents per share, indicating that 10-30 cents per share of distributable profit would be retained within the co-operative.

Fonterra chairman, Sir Henry van der Heyden, said continued strength in global dairy prices, with demand growth beginning to outstrip supply, had driven the Board’s decision to increase the forecast milk price.

The increase is the first since the forecast milk price was raised by $1.10 last November.