WELLINGTON, June 30 (Reuters) - Fonterra Co-operative Group FCG.NZ said late Wednesday that it was cutting its farmgate milk price next season to A$4.75 per kgMS, down from the current price of A$5.00 per kgMS.
The co-operative said that the lower price reflected current market conditions and forecast that it would rise over the 2016/17 season to close at A$5.00 per kgMS
"Our forecast is based on the Australian dollar holding at around 74 cents to the US dollar and reflects the revenue we expect to earn on products produced using our manufacturing assets," Fonterra chief operating officer of velocity and innovation Judith Swales said in a statement.
The move followed rival processor Murray Goulburn's MGC.AX announcement on Tuesday that its opening farmgate price for the season beginning July 1 would be A$4.31.
Both dairy processors' previous decisions to slash farmgate milk prices in May are being investigated by the Australian Competition and Consumer Commission.
The competition watchdog is examining the timing and notice of the cuts, exposing both to fines of A$1.1 million if found guilty of misleading conduct or elements of unconscionable conduct.
Global milk prices have tumbled 60 percent since early 2014, due to a global supply glut and weakness in the Chinese economy.