Fonterra Maintains 2025-2026 Milk Price, Upgrades Full-Year Forecast on Robust Fiscal Third-Quarter
Fonterra Co-operative Group (NZE:FCG) has maintained a robust farmgate milk price forecast for the 2025-2026 season after reporting strong fiscal third-quarter earnings despite global supply chain disruptions caused by the Middle East conflict.The cooperative held its farmgate milk price midpoint at NZ$9.70 per kilogram of milk solids, while narrowing its forecast range to between NZ$9.60 and NZ$9.80 per kgMS, down from a previous spread of NZ$9.40 to NZ$10.00.Prices have remained relatively high despite cost inflation and shipping delays stemming from the war in Iran. In March, shipments bound for the Gulf region faced delays following joint U.S.-Israeli missile strikes on Tehran."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," Fonterra CEO Richard Allen said.Looking ahead, the dairy giant announced a strong opening forecast for the 2026-2027 season, setting the farmgate milk price midpoint at NZ$9.75 per kgMS, with an initial range of NZ$8.00 to NZ$11.00.The forecast came as total operating profit for the fiscal third quarter rose year on year to NZ$1.8 billion from NZ$1.7 billion.Underlying earnings per share increased to NZ$0.57 from NZ$0.53 in the previous year.Allen noted that the cooperative's strategic focus on growing its Ingredients and Foodservice channels enabled it to return NZ$3.2 billion to shareholders. The Ingredients division capitalized on sustained protein demand from the U.S. and Europe, while the Foodservice unit delivered solid growth in both margins and sales volumes.Supported by this performance, the company raised its forecast for full-year earnings to between NZ$0.60 and NZ$0.70 per share."Looking ahead, Fonterra has strong foundations and a clear strategy to deliver value through our global Ingredients and Foodservice businesses," Allen said. "Our full-year earnings guidance reflects the strong shipment volumes expected in the final quarter of the year."