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Fonterra, the New Zealand dairy cooperative, has forecast milk prices for 2025/26 to range between 8.00 and 11.00 NZD/kgMS. This expectation is higher compared to the prices in 2021 and 2022 despite ongoing geopolitical uncertainties.
In late May, Fonterra revealed its milk price forecast for the ending dairy year 2024/25. The on-farm price is expected to be between 9.70 and 10.30 NZD/kg milk solids (kgMS). Excluding dividends, the cooperative anticipates an average payout price of 10.00 NZD/kgMS, equivalent to approximately 40.46 Ct/kg in German standard quality.
Due to strong profits, the company has set its profit margin at 65-75 Ct/share. This represents a slight increase of 5 Ct on average compared to the announcement made in March of this year.
Fonterra expects higher milk prices for 2025/26 compared to previous years.
The demand for dairy products remains high according to Miles Hurrell, CEO of Fonterra. The forecast for the 2024/25 season is attributed to the robust demand for the cooperative's dairy products. Looking ahead to the upcoming season, a stable demand is expected. However, Hurrell also highlighted ongoing geopolitical uncertainties stemming from conflicts in Ukraine and Gaza, as well as the unpredictable trade policies of the US government.
Despite uncertainties, Fonterra has high price expectations. The opening forecast for the on-farm milk price for the 2025/26 season ranges from 8.00 to 11.00 NZD/kgMS, with an average of 10.00 NZD/kgMS. This opening forecast for the 2025/26 season is higher than the beginning of the previous dairy year and also exceeds the peak years of 2021/22 and 2022/23.