Fonterra Cuts 2026/27 Milk Price Forecast to $9.25
Fonterra has reduced its forecast 2026/27 Farmgate Milk Price.
Co-op chairman John Wilson says the forecast payout continues to reflect global dairy markets with steady demand and relatively stable prices.
“World dairy prices have continued to show signs of volatility, but we believe that the fundamentals are sound and expect pricing over the balance of the season to remain stable.
“Our cooperative has a forecast cash payout for this season of $6.40. This is made up of a forecast Farmgate Milk Price of $6.00/kgMS and a target full year dividend of 40 cents per share,” he says.
While the board has confidence in achieving a target dividend of 40c/share, it has revised the forecast earnings per share range to 45-55 cents to reflect the additional volatility.
Wilson says its forecast cash payout reflects a 54% increase in the Farmgate Milk Price compared to last season and consistent earnings.
“An improved $6.00 Milk Price supported by strong performance will result in an additional $3 billion going into the New Zealand economy this season.
“We see some challenges and opportunities ahead in the second half. The additional milk at the end of the season is welcome for our farmers and our management team are focused on ensuring that we get the highest value from this milk.
“The impact of more volatility in product stream returns in our Ingredients business, some tightening of margins in the coming months, and the potential for extra milk in the autumn could result in some pressure on our earnings in the second half.”
Fonterra announced its half year results today; revenue was up 5% on the same period last year, and net profit after tax up 2%.a strong first half.
Wilson says the co-op had a strong half-year result.
Revenue was higher at $9.2 billion and normalised EBIT was again over $600 million with net profit after tax of $418 million.
