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Fonterra expects higher dividend and adds surcharge
Dairy giant Fonterra expects to be able to reward its New Zealand members even higher than it reported in December. At that time, the cooperative company raised its forecast for the milk price. This time, the dividend forecast is also going up.
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The expectation set at the beginning of December NZ$9,50 per kilo of fat and protein (€39,36 per 100 kilos of milk) remains intact. The dividend expectation is increased from 40 to 60 cents per share to 50 to 60 cents (27 to 32 euro cents).
Fonterra is having a very good production season, thanks to good grass growth and good weather. In the current year 2024/25, the company's New Zealand milk supply is 3,6% higher than the previous year. Milking is particularly strong on the North Island (+5%). Things are somewhat quieter on the South Island and in Australia.
China not a stumbling block
Exports are also doing well, both to Asian markets and South America. Exports to China fell sharply (-8,8% over the whole of 2024), but picked up again in December. Exports to the Middle East and North Africa were also lower. Nevertheless, Fonterra is booking good results.
She also does this with the sale of dairy to large food companies such as Nestlé and Mars. They have, just like in the Netherlands and other European countries, made agreements with Fonterra about the supply of low-carbon milk. Fonterra members who produce milk with a low carbon content will receive an extra bonus from these companies, starting on 2 June 2.
Climate allowances
Participating companies can choose between roughly two reduction levels. Those who opt for a limited reduction package can earn (converted) approximately 4 to 21 euro cents per 100 kilos of milk. This is on top of the 40 cents that Fonterra itself already pays for CO2 reduction. This package is feasible for an estimated 5.000 New Zealand companies.
There is also a more robust reduction package for farmers who try to get their CO2 emissions 30% below the 2017/2018 level. They can earn up to €1,025 per 100 kilos of milk. However, it is estimated that only 300 to 500 companies can make do with this.