Casein, milkfat prices boost forecast for Fonterra
Strong casein and milkfat prices boost Fonterra payout prediction
By Pattrick Smellie
Sept. 18 (BusinessWire) - Booming prices for casein and anhydrous milkfat could offset sagging milkpowder prices to push Fonterra's payout up a further 20 cents to $4.85 per kilogram of milksolids, says NZX Agrifax in an updated forecast.
"The NZX Agrifax weighted average price of dairy commodities bottomed out in early July at US$2290 a tonne, but since soared 37% over the past three months, to currently sit at US$3130 a tonne," said analyst Phil van Polanen in a statement.
AMF prices jumped 13% this week, having risen from a low of US$1850 a tonne in March to US$3100 a tonne now. Likewise, casein prices had risen from US$5500 a tonne to US$6700 a tonne and may breach US$7000, Agrifax said.
The dark cloud is wholemilk powder, which shows some signs of easing in the October 6 Fonterra globalDairyTrade auction on October 6.
"Even with a 10 to 15% drop in the NZX Agrifax weighted average dairy commodity price, of which wholemilk powder has a significant weighting, and with the New Zealand dollar continuing to average US70 cents for the remainder of the season, a $4.85 payout is still viable."