Fonterra raises milk price forecast amid stronger global demand

Fonterra has revised its forecast Farmgate Milk Price midpoint upward, citing improved global commodity prices and strong demand. The midpoint has increased to $9.50 per kgMS, with the forecast range narrowed to $8.50 – $10.50 per kgMS.

CEO Richard Allen noted that Global Dairy Trade (GDT) auction results for key products, specifically whole milk powder and skim milk powder, have shown improvement since the company's last update in July. While the outlook is positive due to focused execution in B2B businesses, Allen cautioned that geopolitical volatility remains a factor that could influence future seasons.

In addition to the price revision, Fonterra expects its full-year underlying earnings for 2026 to reach the top end of its previously announced range of 60-70 cents per share, which is expected to support a strong dividend.