Firm milk prices ended at the auction but fonterra is expected to raise their forecasts. The decline, which included a 3.7% drop in key whole milk powder prices to US$3,189 a tonne, was broadly in line with futures market pricing, and followed two straight auction gains. Fonterra's South Island competitor, Synlait Milk, has raised already raised its milk price to $6.25/kg. ANZ expects Fonterra's milk price to improve to $6.25/kg, as do many other banks. "We continue to see EU and US skim milk prices plummet while Fonterra's price (on GDT) has held firm," he said.

Source: Otago Daily Times February 22, 2017 03:01 UTC