- The GDT price index fell 1.3% with the average price reaching US$4600/MT.
- Fonterra’s global ingredients and solutions brand, NZMP, has recently launched Pro-Optima, which is a Grade A whey protein concentrate.
- ATM remains focused on taking initiatives that will help in its growth.
Dairy prices witnessed a marginal decline in the latest Global Dairy Trade (GDT) price auction held on 21 June. Dairy prices had risen 1.5% in the previous auction held 2 weeks ago, the first increase after 5 consecutive drops since 1 March.
The GDT price index fell 1.3% with the average price reaching US$4600/MT with 20,760MT of product sold. Whole milk powder fell 0.6% to $4,125, butter prices rose 2.4% to $6,123 and skim milk powder increased 1% to $4,276.
Amid this backdrop, let’s see how these 3 NZX dairy stocks are doing.
Source: © Tenkende | Megapixl.com
Infant nutrition company the a2 Milk’s interim results remained in line with its expectations. The Company faced challenging market conditions in H1 FY22 due to a drop in the China infant milk formula (IMF) market and external factors.
ATM expects higher revenue in H2 FY22 and growth in FY22 due to growth in the China label and English label IMF. The Company expects capital expenditure to be $15 million-18 million in H2 FY22.
ATM has a well-defined growth plan. It remains focused on taking initiatives that will help in its growth.
On 22 June, at the time of writing, ATM was trading at $4.63, down 2.73%.
Dairy processing firm Synlait has set the opening forecast price for the 2022/23 season at $9 per kgMS. The Group has lowered the forecast milk price from $9.6 per kgMS earlier to $9.3 per kgMS for the 2021/22 season.
The Group expects the 2022/23 season final milk price to be contingent on the global situation. This expectation comes even if some products have been sold at record high prices and forex movements are encouraging a strong milk price.
SML will verify its final milk price for the 2021/22 season at the time of the release of FY22 results, due in September.
On 22 June, at the time of writing, SML was trading at $3.24, up 1.25%.
Fonterra Co-operative Group Limited (NZX:FCG)
Dairy co-operative Fonterra’s global ingredients and solutions brand, NZMP, has recently launched Pro-Optima, which is a Grade A whey protein concentrate. It has entered into a JV with global ingredients and solutions brand, Tillamook County Creamery Association, and Three Mile Canyon Farms, in the US to launch the product.
Fonterra has estimated farmgate milk price to be $9.10-$9.50 per kgMS for the 2021/22 season and a mid-point of $9.3. The opening forecast farmgate milk price has been set at $8.25-$9.75 per kgMS by the firm for the 2022/23 season.
On 8 June, the Group announced that it would allocate up to $50 million to the share buyback program, which will start on 30 June 2022.
On 22 June, at the time of writing, FCG was trading flat at $2.7.
The NZ government’s report has pointed out that the dairy sector is expected to be worth over $21 billion in 2022 and might be $24 billion by 2026.
(NOTE: Currency is reported in NZ Dollar unless stated otherwise)