Fonterra (ASX:FCG) has updated its forecast for the 2023/24 season farmgate milk prices, marking a reduction from initially projected prices of NZ$6.25 to NZ$7.75 per kilogram of milk solids (kgms).

The revised price range is now set at NZ$6.00 to NZ$7.50 per kgms, with a midpoint of NZ$6.75 per kgms.

This adjustment follows a continued decline in Global Dairy Trade prices since the New Zealand-based dairy company initially reassessed its farmgate milk price earlier in August.

Fonterra cited weakening demand for whole milk powder from key importing regions as a leading factor in the deflation of prices.

However, they anticipate that demand will begin to rebound in the second half of FY24, albeit at a more subdued pace compared to initial expectations.

Fonterra is a dairy co-operative headquartered in New Zealand, known for being the world’s largest exporter of dairy products.