• Step up of 20 cents in average milk price to $5.50 per kilogram of milk solids (kgMS)
• Updated forecast closing milk price range of $5.50 to $5.80kgMS for the 2017/18 season
• Previously announced additional 40 cents/kgMS payment takes total cash paid to $5.90kgMS, and forecast closing range cash paid to $5.90 to $6.20kgMS.

Fonterra’s additional payment of 40 cents/kgMS is payable on top of the revised farmgate milk price, and brings the total average cash paid to $5.90kgMS.

Fonterra Australia Managing Director René Dedoncker said that improved market conditions and the strength of the Australian business supported this step up.

“Since the start of this season our milk pool has grown, and our assets are nearing optimal capacity,” said René.

“Coupled with strong demand from Fonterra’s Australian and global customers, this has enabled us to deliver this step up to our farmers.

“This price increase will improve cashflow positions on farm, reinforcing growing confidence of our farmers.”

Fonterra has also updated its forecast closing milk price range, to $5.50 to $5.80kgMS, and noted that while commodity prices are strong, the rally in the Australian dollar was likely to influence the end of season milk price within that forecast range.

“We continue to monitor currency movements closely and will keep our farmers updated throughout the season with the latest market conditions.”