Dairy stocks mixed as Synlait upgrades milk price target

The news: Shares in A2 Milk and Synlait have been mixed in early trading after Synlait upped its milk price forecast amid tighter global milk production and improving diary prices. Both stocks initially rose in early trading, before Synlait's snapped back to 1.8% below yesterday's close.

The numbers: A2 was up 1.6% by 10:40am AEDT and has so far held its gains. In an ASX announcement, Synlait lifted its 2023/24 season milk price to $7.50 per kilogram of milk solids from $7.25/kgMS, noting subdued global demand but banking on tighter supply conditions.

The context: Synlait, A2 and their dairy suppliers in Australia and New Zealand will be looking for relief this year after global demand, particularly from China's massive market for baby formula, weakened in 2023, weighing on each company's share price.