The bank left its 2026/27 milk price outlook unchanged at NZ$8.70/kgMS, warning that strong global milk production is likely to weigh on dairy commodity prices over the coming year. ANZ economist Matt Dilly said milk output continues to expand across all major exporting regions, creating a more bearish global supply-and-demand balance.

According to Dilly, global dairy markets have staged a dramatic turnaround since the start of the year. After a weak finish to 2025, geopolitical tensions initially pushed commodity prices higher, including dairy. By late February, buyers who had expected prices to fall further rushed back into the market, helping drive a sharp rally through March.

ANZ believes the final payout for the current season is now likely to exceed even the most optimistic forecasts seen earlier this year. The bank noted that by this stage of the season, Fonterra has already secured most of the pricing components in its milk price formula. Last month, the co-operative lifted its forecast midpoint from NZ$9.50/kgMS to NZ$9.70/kgMS and widened its range to NZ$9.40-$10.00/kgMS.