Fonterra financial performance and milk price outlook

Fonterra has reported strong annual results for the 2026 fiscal year, characterized by a $2.6 billion after-tax profit on $27 billion in revenue. This represents a 142% increase in profit, with operating profit rising 97.6% to $3.4 billion. This growth was significantly bolstered by a $1.2 billion benefit from the sale of the Mainland Group. Excluding this divestment, the underlying operating profit rose 23.6% to $1.8 billion, allowing the co-operative to restore earnings to FY25 levels two years ahead of its original three-year schedule.

In terms of shareholder returns, the company distributed $19.6 billion to farmer owners and unit holders. Total dividends reached 73 cents per share, which included a 16-cent special dividend linked to the Mainland Group sale. The final Farmgate Milk Price for the 2025/26 season was established at NZ $9.69 per kgMS.

Looking forward, Fonterra has set a forecast for the 2026/27 milk price at a midpoint of NZ $9.50 per kgMS, with a projected range between $8.50 and $10.50. To support future operations and expand protein production capacity, the company is proceeding with a $1 billion investment in its South Island manufacturing network to be deployed over the next three years.