Fonterra has announced this morning that its opening forecast farmgate milk price has been set at $7.00 per kg of milk solids for the 2013/14 season - up $1.20 on the current season - but that dairy commodity prices appear to have peaked.
Fonterra said it was holding its current forecast farmgate milk price for the current season, which finishes on Friday, at $5.80 per kg, and a forecast dividend of 32 cents per share, amounting to a cash payout of $6.12 for a fully shared-up farmer.
"We are maintaining our current season forecast but advising farmers to be cautious in managing their budgets as we have seen a sharp drop in milk volumes as a result of the drought, and recent declines in GlobalDairyTrade auction results," chairman John Wilson said in a statement.
Chief executive Theo Spierings said Fonterra was currently preparing its budgets for 2014.
He said shareholders and unit holders should expect the strong uplift in international dairy powder prices to create "a more challenging environment" for Fonterra's earnings in the first half of the 2014 financial year.