Fonterra Co-operative Group Ltd has updated its forecast for the 2026/27 Farmgate Milk Price, off the back of declining prices at recent Global Dairy Trade (GDT) auctions.
The revised forecast is NZD 9.25 per kgMS, with a new range of NZD 8.00 to NZD 10.50 per kgMS.
This is down from the opening forecast of NZD 9.75 per kgMS announced in May, when the Co-operative started with a wide range of NZD 8.00 to NZD 11.00 per kgMS to reflect the potential for volatility and varied outcomes throughout the season.
Fonterra CEO Richard Allen said the change to the 2026/27 forecast reflected softer-than-expected demand amid strong global supply.
“GDT prices have fallen 11 percent 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 start to the season in New Zealand, noting the potential for the El Niño weather pattern to impact global supply as the season progresses.
He added that it was very early days in terms of the proportion of the FY27 sales book that has been contracted, so the co-op has faced significant exposure to changes in commodity prices. It will continue to focus on maximising returns for its farmer shareholders.
As the seasonal supply picks up, Allen highlighted that the plan will ensure the co-op utilises its flexible operations footprint, strong customer relationships, and robust supply chain to shift milk into products and markets where it can deliver the best returns for farmers’ milk.
The 2025/26 forecast Farmgate Milk Price of NZD 9.60 to NZD 9.80 per kgMS, with a mid-point of NZD 9.70, remains unchanged.
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