Fonterra Trims Milk Price Forecast Amid Weak Demand

New Zealand dairy giant Fonterra has lowered the top end of its milk price forecast for the 2026/27 season, citing weaker-than-expected global demand and robust supply from key exporting regions. The farmgate milk price forecast has been adjusted to NZ$8.00 to NZ$10.50 per kilogram of milk solids (kgMS), down from the previous range of NZ$8.00 to NZ$11.00 per kgMS.

Fonterra noted that Global Dairy Trade prices have fallen 11% across relevant products since the opening forecast was announced in late May, while milk production from key exporting regions has increased year-on-year. The company anticipates a strong start to New Zealand's season, though the El Niño weather pattern remains a potential factor for global dairy supplies.

The forecast for the 2025/26 season has been kept unchanged at NZ$9.60 - NZ$9.80 per kgMS. Fonterra chief executive Richard Allen stated that the revised forecast reflects softer demand amid strong supply, with the most recent Global Dairy Trade auction seeing a price index fall of 4.9 percent. Another report indicated a midpoint forecast of $9.00/kg for 2026, with a range of $8.50-$9.50/kg, influenced by strong global milk flows and a rising New Zealand dollar.