The new price is driven by the strong increase in dairy commodity prices over recent months and the company’s view that these prices will remain around current levels for the rest of the season.
In December Synlait reduced its guidance for net profit by half because of a 35% expected cut in infant formula volume for the year.
That was a flow-on effect from cornerstone shareholder and major customer a2 Milk Company’s forecast downgrades after covid-19 disruption to its China trading.
Synlait national milk supply manager David Williams said despite wider global uncertainty, dairy commodity prices had remained robust.
The milk price forecast would be reviewed again in May.
Synlait’s $7.20 forecast is at the top end of the prediction range of industry giant Fonterra, presently $6.70 to $7.30/kg, and will lift dairy farmers’ expectations of an upgrade by Fonterra in the near future.
