Fonterra co-op warned of the potential impacts of “ongoing geopolitical risks and inflationary pressures” as it confirmed its 2026/2027 farmgate milk price today (Thursday, May 28).
New Zealand’s largest dairy company announced an opening forecast farmgate milk price for the 2026/2027 season of $9.75 with a range of $8.00-$11.00 per kilograms of milk solids (kgMS) to reflect these risks.
Its forecast farmgate milk price midpoint for the current season is unchanged at $9.70 per kgMS, with the range narrowing to $9.60-$9.80 per kgMS.
According to the co-op, season to date milk collections currently stand at 1,489 million kgMS, which is up up 4% on last season.
Fonterra today released its full year 2026 quarter three (Q3) business update, which highlighted an operating profit of $1.8 billion – up $103 million on this time last year.
Its chief executive Richard Allen believes the co-op has “delivered another strong result”.
“Milk production is up considerably this season, and despite disruption in global supply chains, our sales book is well contracted and our shipping volumes are strong, with the highest third quarter shipment volumes in a decade.
“As we look ahead to next season, we expect milk collections to remain high, in line with this season.
“Our in-market sales teams are anticipating solid demand from across the regions despite potential volatility, and this is reflected in our opening forecast range,” Allen added.
Fonterra
The co-op’s latest financial update shows its ingredients business has benefited from ongoing protein demand in the US and Europe, while its foodservice division has also continued to achieve both volume and margin growth.
Fonterra’s CEO said the co-op is committed to “delivering on its strategy and growing value for farmer owners as a global B2B dairy provider”.
“During the quarter, we completed the sale of Mainland Group and returned $3.2 billion to shareholders and unit holders.
“This marked a significant step in the delivery of our strategy, with the co-operative firmly focused on growing our high-value ingredients and foodservice businesses,” Allen added.
Looking ahead he believes Fonterra has strong foundations.
“Our full year earnings guidance reflects the strong shipment volumes expected in the final quarter of the year.
“However, we acknowledge the uncertainty caused by the ongoing conflict in the Middle East.
“Like our farmers, and others around the world, we are experiencing cost inflation and shipping disruptions,” the Fonterra CEO added.