News Milk
Fonterra lowers milk price for the second time in a short period
Fonterra has lowered its milk price for the current season for the second time in a short period. The dairy cooperative is noticing sluggish dairy sales due to a significant increase in global milk production and the strengthened New Zealand dollar.
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End november The forecast price for the 2025/26 season had already been lowered, and less than a month later, it was revised downward again: by $0,50 to $9 per kilo of milk solids. Explaining the decision, CEO Miles Hurrel stated that the increase in milk production in New Zealand, the United States, and the European Union is putting pressure on global dairy prices. This is also reflected in the Global Dairy Trade, which fell again by 4,4% earlier this week. Nevertheless, Fonterra had a good first quarter with a profit of NZ$278 million.
Fonterra also claims the New Zealand currency is a hindrance. The dairy cooperative exports approximately 95% of its domestic production, making it one of the largest exporters. Since mid-November, the currency has appreciated rapidly, though it was already in a downward trend. A year ago, the currency was worth roughly the same as it is now.
Higher supply
New Zealand's milk supply continues to perform well this season. Production in October was 3.130 tons of solids, representing a 1,7% increase compared to the same period last year. Due to higher milk solids content, production in kilograms of milk solids was 2,8% higher. The annual production peak hasn't been as high as it is now since 2021. From November onwards, supply will decline seasonally.