Fonterra cuts milk price mid-point forecast to $9.50/kg

Fonterra has cut its farmgate milk price forecast for the current season. Photo / Rowena Duncum

Fonterra has cut its farmgate milk price forecast for the current season due to increased global milk supply.

The co-op has narrowed its forecast range from $9.00-$11.00 per kg of milksolids to $9.00-$10.00 per kgMS, with the midpoint falling from $10.00/kg to $9.50/kg.

Fonterra also increased its forecast milk collections for the 2025/26 season from 1525 million kgMS to 1545 million kgMS.

Chief executive Miles Hurrell said there had been strong milk flows this season, both in New Zealand and in other milk producing nations.

“This increase in milk supply has put downward pressure on global commodity prices, with seven consecutive price drops in recent Global Dairy Trade [GDT] events.”

At the last sale on November 19, the GDT price index fell by 3% while whole milk powder prices - key to the milk price - dropped by 1.9% to US$3452/tonne.

Fonterra started the season with a wide forecast range of $8.00-$11.00 per kgMS.

The new midpoint of $9.50 per kgMS is in the middle of this range and remained a strong forecast for the season, Hurrell said.

“We continue to be focused on maximising returns for farmer shareholders through both the farmgate milk price and earnings.

“This includes through building strong relationships with customers who value our products, utilising price risk management tools, and optimising our product mix.”

Jamie Gray is an Auckland-based journalist, covering the financial markets, the primary sector and energy. He joined the Herald in 2011.

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