Fonterra narrows milk price forecast amid strong supply

Fonterra Co-operative Group Ltd has updated its forecast Farmgate Milk Price, narrowing the range from $9.00-$11.00 per kgMS to $9.00-$10.00 per kgMS. The midpoint has consequently shifted from $10.00 per kgMS to $9.50 per kgMS. This adjustment reflects strong milk flows observed both in New Zealand and other milk-producing nations.

The co-op has also increased its forecast milk collections for the 2025/26 season, raising the projection from 1,525 million kgMS to 1,545 million kgMS. chief executive Miles Hurrell noted that increased milk supply has exerted downward pressure on global commodity prices, evidenced by seven consecutive price drops in recent Global Dairy Trade events.

Despite the narrowed range, Mr. Hurrell stated that the new midpoint of $9.50 per kgMS remains a strong forecast. Fonterra continues to prioritize maximizing returns for farmer shareholders through the Farmgate Milk Price and earnings, employing strategies such as building strong customer relationships, utilizing price risk management tools, and optimizing its product mix.