Fonterra remains positive despite 'clouds on the horizon'

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Dairy is still "the place to be" despite Covid-19 making things "a wee bit bumpy" says Fonterra's Managing Director for Co-operative Affairs Mike Cronin.

"The world's going to need nutrition over the longer term" Cronin told The Country Early Edition's Rowena Duncum.

Fonterra still had a "pretty healthy" forecast milk price for this season with a range of $7.00 to $7.60 per kilogram of milk solids, said Cronin.

"That's keeping us on track to contribute about 11 billion dollars into the New Zealand economy and we know that half of that goes into local communities."

However, there were still some clouds on the horizon despite this positive outlook, said Cronin.

Listen below:

"It's a little bit difficult for anyone to really forecast what's going to happen. There's a few clouds out there. No one really knows what Covid-19's going to do, what the new normal is."

While Fonterra was well-placed to face any level of local or global uncertainty, Cronin still urged farmers to keep a "sharp eye" on their budgets and "be really cautious on significant on-farm decisions."

Covid-19 was could also have an impact on next season's milk price, said Cronin.

"We're due to announce our opening forecast for the '21 season towards the end of May and we'll just keep looking at the high levels of uncertainty and see what's going on. We look at the New Zealand/US exchange rate ... and we'll come up with a forecast for next year."

Also in today's interview: Cronin said the 4.2 per cent drop in the latest Global Dairy Trade Auction was not as negative as it seemed.