The milk price rise reflects a 16 cents step - up per kilogram of butterfat and a 40 cents step - up per kilogram of protein for Fonterra's Tasmanian and Victorian suppliers, and reflects the strength of
global dairy commodity prices amid rampant Asian demand and limited supply.
Revenue totalled $ 263.6 m (A$ 366.8 m) in 1H FY2016, down 1.5 % from 1H 2015, with
weak dairy commodity prices for bulk cheddar cheese and whey powder adversely impacting sales revenue.
The Global Dairy Trade (GDT) Price Index, a weighted average of percentage changes in
dairy commodity prices on the Fonterra owned platform, has risen 42.2 % over the last three auctions.
Soaring dairy commodity prices and a wave of mergers and acquisitions in the dairy industry are boosting sentiment and pushing up farmgate milk prices.
Peter Sklar, analyst at the Bank of Montreal, wrote in a report that its earnings will be suppressed through fiscal 2016 primarily due to
low dairy commodity prices.
Whether it's China's demand for imported milk products, the weather situation in New Zealand, or changes in
world dairy commodity prices, this publication keeps members abreast of the market situation and outlook.
Against this backdrop, the company faces a class action, is being investigated by ASIC and the competition regulator ACCC has taken legal action in the Federal Court, alleging unconscionable conduct and misleading farmers in relation to forecasting a milk price of $ 6.05 when it allegedly
knew dairy commodity prices were falling globally.
Dairy commodity prices fell 7.9 % at the latest Global Dairy Trade (GDT) auction - the third decrease in average prices on the platform in a row.
Mr Irvin said near -
record dairy commodity prices appeared to be here to stay because of the strength of demand in China, reporting an 18 per cent rise in half - year profit to $ 18.7 million.
Michael Harvey, a senior analyst (dairy) with Rabobank, said he was optimistic for the Australian industry after global
dairy commodity prices started to firm from the middle of 2016.
The company said it represented strong performance in the context of low
global dairy commodity prices, significant increase in global dairy production and continuing sanctions in Russia affecting global supply and demand.
Soaring dairy commodity prices and a weaker Australian dollar have helped Victorian dairy group Warrnambool Cheese & Butter more than double its half - year profit to $ 31.3 million.
Looking forward, the expectation is that
dairy commodity prices will «generally remain in touch» with current levels through the second quarter of 2010.
WCB chief executive David Lord said strong international
dairy commodity pricing and demand and the declining Australian dollar were a tailwind for earnings.
While the long - term demand for milk powder, infant formula and cheese is strong,
dairy commodity prices have been highly volatile and collapsed in the second half of 2014.
Dairy commodity prices have surged, and whole milk powder prices are near record levels.
The outlook for international
dairy commodity prices has deteriorated since the September 11 terrorist attacks on the US and may be slow to recover, according to New Zealand dairy concern Fonterra Cooperative Group, Industry Search reports this week.
Another spike in global
dairy commodity prices should mean a bit more cream on this season's Fonterra payout and a positive payout start to the new season, but the record prices will likely run out of road after mid-year, economists suggest.