However, there are favourable signals for the season ahead that are building optimism for F26, including the increase in global dairy prices over the last 12 months. Global demand has shown signs of growth, with constrained global supply driving an uptick in global prices throughout the year. Australian dairy exports have strengthened on the previous year in value and volume. These improvements have been supported by a return to balance between local and global dairy prices and a favourable, yet volatile Australian dollar.

Our domestic market, where we direct the majority of your milk, remains challenging. Inflationary pressures have yet to fully ease, and segments of Australian consumers continue to chase value through lower-cost dairy products. Foodservice channels, both locally and globally, are facing a multi-year recovery as even lower-cost restaurants are challenged as households eat out less.

While there’s room for local demand to lift, we remain confident in the strength of our business and ability to be competitive on price as we navigate these conditions throughout the season. This is underpinned by the diversity of multiple dairy product types, sales channels, and markets that we sell into.

We are committed to paying a competitive milk price throughout the season. As part of our bi-monthly review process, we will continually assess market conditions and look to increase the milk price when it’s supported by the market and our business performance, as we did in F25.

We acknowledge the prolonged dry conditions and the impact on farmers right across the industry. These challenges are well understood throughout our business, and it remains our priority to support you in partnership through Farm Source Professional and our regional teams.

The Fonterra Co-operative Group continues to pursue divestment options for the global Consumer and associated business, which includes Fonterra’s Australian operations. Your milk contracts remain one of our most valuable assets, and we assure you they will carry through as part of any trade sale or Initial Public Offering (IPO).

Our Supplier Meetings commence soon, and we will be out in our dairy regions to share our thoughts on the market conditions and to update you on our business. This will be my first time attending Supplier Meetings and I look forward to meeting you soon.

Your Area Manager will be in touch to help with an income estimate and to assist you in making the best choice for your business on the different available pricing models. I hope to that you choose to partner with us again this coming season.

Yours sincerely,

David Breckenridge
Managing Director, Fonterra Oceania

You can now read the most important #news on #eDairyNews #Whatsapp channels!!!

🇺🇸 eDairy News INGLÊS: https://whatsapp.com/channel/0029VaKsjzGDTkJyIN6hcP1K