The A2 Milk Company Ltd (ASX: A2M) share price is in the red on Wednesday despite the company's silence.
However, eagle-eyed investors might have noticed a new announcement from the company's dual-listed supplier, Synlait Milk Ltd (ASX: SM1).
The A2 Milk share price is down 0.66% at the time of writing, trading at $5.295.
For comparison, the S&P/ASX 200 Index (ASX: XJO) is down 1.3% right now, on the back of unexpected inflation data.
So, what might have turned the market's attention towards its former darling today? Let's take a look.
Why are eyes on the A2 Milk share price today?
There's been no word to explain the A2 Milk share price slip today. Though, the stock is outperforming the ASX 200 at the time of writing.
However, the attention of market watchers might have been grabbed by news from Sylait. Of course, A2 Milk fans will likely remember last month's drama between the companies.
A brief recap
Synlait downgraded its full-year guidance in late April, dropping its forecasted net profit after tax (NPAT) by around $18.5 million Australian to between a $4.6 million loss to a $4.6 million profit. Those figures are based on the current Australian dollar to New Zealand dollar exchange rate (NZ$1 to 93 Aussie cents).
Much of the drop was blamed on a reduction in demand at its advanced nutrition business – with one customer in particular to blame.
In response, A2 Milk admitted it had reduced its production volume needs amid weakness in its daigou (private sellers to China) channels, inventory build-up, and distribution adjustments.
The latest from Synlait
It makes sense, then, that many eyes turned to A2 Milk when Synlait reduced its milk price guidance this morning.
In an update to the New Zealand stock exchange, the company dropped its forecasted base milk price for the 2022/2023 season to around $7.60 per kilogram of milk solids. That was a 1.2% drop on its prior guidance. The company said:
The reduction was driven by weaker than expected commodity prices nearing the end of the season, along with the continued high cost of lactose imported into New Zealand.
Subdued global economic activity also continues to weigh down consumer demand, while global milk production recovered.
A2 Milk share price snapshot
Today's slip sees the A2 Milk share price even deeper in the long-term red.
The stock has fallen 22% since the start of 2023. Though, it has gained 10% since this time last year.
For comparison, the ASX 200 has risen 3% year to date and has fallen 1% over the last 12 months.
