Fonterra chief executive officer Miles Hurrell said the stronger 2020-21 milk price forecast is largely being driven by improved demand in China.
“Despite the initial impact of COVID-19, we have seen demand for dairy in China recover quickly,” he said.
“In particular, demand for whole milk powder, which is a big driver of milk price, has been stronger than expected.
“While it is still early in the season, dairy prices have improved from the levels we saw on the Global Dairy Trade through the first wave of COVID-19 and demand for milk powders has proved resilient.
“We have seen this demand reflected in Global Dairy Trade auctions, with prices trending upwards in recent events and this is supporting our decision to lift the range and its mid-point, which farmers are paid off.”