NZ's Fonterra lowers annual milk price forecast due to oversupply (updated)

Fonterra-operative

17/12/2025 20:13

Rewrites paragraph 1, adds further details in graphs 3 and 4

Dec 18 (Reuters) - New Zealand dairy giant Fonterra Co-operative Group FCG.NZ on Thursday marginally lowered its milk price forecast for the 2025/2026 season, marking the firm's second such downgrade since November.

The dairy producer cut the annual forecast for farmgate milk price — the price it pays to farmers for milk — to NZ$8.50-NZ$9.50 per kilogram of milk solids (kgMS) from NZ$9.00-NZ$10.00.

Fonterra said that strong milk output from New Zealand, along with high supply from the U.S. and Europe, was pressuring global dairy commodity prices.

"Combined with a rising New Zealand dollar since the last milk price update in November, we are required to further adjust the forecast range for the season and lower our midpoint," said CEO Miles Hurrell.

However, the midpoint of the latest forecast, which is NZ$9.00 per kgMS, remains within the range of NZ$8.00-NZ$11.00 per kgMS provided by the firm at the start of the season.

 (Reporting by Nichiket Sunil in Bengaluru; Editing by Shinjini Ganguli)

 ((Nichiket.Sunil@thomsonreuters.com))