Dairy giant Fonterra has raised its earnings and milk price forecasts for the 2023/24 season, following a strong first quarter.
The forecast Farmgate Milk Price midpoint has been increased by 25 cents to $7.50 per kilogram of milk solids (kgMS).
The forecast range has also been adjusted from $6.50-$8.00 per kgMS to $7.00-$8.00 per kgMS.
Fonterra attributed the upward revision to the strengthening demand for reference commodity products from key importing regions, including China.
The company's improved performance in all three of its sales channels - ingredients, foodservice, and consumer - also contributed to strong earnings for the first quarter.
Fonterra's profit after tax rose 85% to $392 million, while earnings before interest and tax (EBIT) increased by 63% to $575 million.
However, Fonterra CEO Miles Hurrell cautioned that there could still be volatility in commodity prices and said the company would continue to monitor market dynamics closely.
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