Fonterra has cut its 2026/2027 milk payout forecast by -50c/kgMS or -5.1%.
CEO Richard Allen says the reduction reflects softer-than-expected demand at a time of strong global supply.
The revised forecast is $9.25 per kgMS, with a new range of $8.00 - $10.50 per kgMS. This is down from the opening forecast of $9.75 per kgMS announced in May, when the Co-operative started with a wide range of $8.00 - $11.00 per kgMS.
“GDT prices have fallen 11% across the reference products that inform the Farmgate Milk Price since we announced the opening forecast in late May, while milk production from key exporting regions is up on last year, said Allen. "We’re expecting a strong [volume] start to the season in New Zealand, noting the potential for the El Niño weather pattern to impact global supply as the season progresses.”
Very little of the new year sales book has been contracted so far, which exposes them to the global retreat in dairy commodity prices.
The 2025/26 season which has just completed had a forecast Farmgate Milk Price of $9.60 - $9.80 per kgMS, with a mid-point of $9.70, and that remains unchanged.
You can see a longer run perspective of dairy payout levels and forecasts here.
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