May 28, 2020

Synlait Milk lowered its milk price estimate for the current season on Thursday, due to lower dairy prices along with a global slump in commodity prices amid the COVID-19 crisis, Reuters reported.

The New Zealand-based dairy firm said it now forecasts base milk price for the 2019-2020 season to be NZD7.05 per kilogramme of milk solids (kgMS), versus NZD7.25 kgMS earlier this year.

Synlait, which is part-owned by a2 Milk Company, set the opening forecast for the 2020-2021 season at an even weaker figure of NZD6.00 kgMS.

"We don't yet have a clear view of COVID-19's economic impact, but we do know it will impact demand, resulting in our decision to release a conservative opening forecast for the 2020/2021 season," Chief Executive Officer Leon Clement said.

As of last week, global dairy prices have declined nearly 14% compared with the prices on January 7.

The world's biggest dairy exporter Fonterra also announced a cut to farmgate prices last week for the 2020-21 season as demand falters during restrictions to contain the virus.