Co-operative milk processor Fonterra has firmed its milk price forecast of $9.70 a kg of milk solids for the current season – the second highest in its history – and issued an opening forecast for 2027 of $9.75.
The announcement came as Fonterra reported third-quarter results featuring an operating profit of $1.8 billion, up $103 million from the same period a year earlier.
Chief executive Richard Allen said it was another strong result.
“Milk production is up considerably this season, and despite disruption in global supply chains, our sales book is well contracted and our shipping volumes are strong, with the highest third-quarter shipment volumes in a decade,” he said.
“As we look ahead to next season, we expect milk collections to remain high, in line with this season. Our in-market sales teams are anticipating solid demand from across the regions despite potential volatility, and this is reflected in our opening forecast range.”
Richard Allen.
The 2026 milk price forecast range was narrowed to between $9.60 and $9.80 per kg, from the previous $9.40-$10, with the same midpoint.
The opening 2027 forecast included a range of $8-$11 a kg. The milk price outlook follows a record 2025 price of $10.16 a kg.
Earnings guidance
In guidance for its full-year result, Fonterra increased its forecast earnings per share to 60-70c, up from 50-65c.
Allen said the guidance “reflects the strong shipment volumes expected in the final quarter of the year. However, we acknowledge the uncertainty caused by the ongoing conflict in the Middle East. Like our farmers, and others around the world, we are experiencing cost inflation and shipping disruptions. We are confident that our deep relationships with customers and logistics partners will continue to help us navigate these challenges.”
Fonterra confirmed it would proceed with plans to expand its organic business into the South Island, based on strong farmer interest. Organic milk has a higher price at the farm gate, with a 2026 forecast of $14 a kg.
During the third quarter, Fonterra completed its payout of $3.2b to shareholders and unit holders with proceeds from the sale of its Mainland consumer brands business.
