Synlait milk price forecast stays at $6.50

Synlait's dairy factory at Dunsandel, when completed in 2008. Photo / Supplied

Synlait has reaffirmed its $6.50 milk price for the current 2017-18 season, but not without throwing in a caution.

Synlait chief executive John Penno signalled the forecast was dependent on commodity prices continuing to firm for the rest of the season, saying "global pricing remains unpredictable''.

"Milk prices have largely been dropping since October, but over the past month the strengthening outlook for the global economy, subsequent rising general commodity prices, and the reduced milk production forecast due to difficult weather conditions, have seen dairy commodity prices strengthen,'' Mr Penno said.

Fonterra's forecast at present sits at $6.40.

Less than two weeks ago Fonterra lowered its forecast milk collection, down 3% on the previous season.

Dry weather in early December significantly affected soil moisture and pasture quality across the country and, despite some rain, Fonterra did not think it was enough to bring production back to earlier forecast ranges.

Synlait shares, which have gained 124% in value during the past year, were down slightly after the announcement, at $7.09.