Co-op posts five-year collection peak, but faces pressure as rivals nibble at NZ market share and global competition intensifies.
Fonterra Co-operative Group recorded its highest milk solids collection in five years, reaching 1.50 billion kgMS for the 2024/25 season, a 2.6% increase year-on-year and slightly above its November projection. Despite this production milestone, Fonterra’s share of New Zealand’s milk pool fell to 77.7%, its lowest in recent years and slightly below its 78% long-term target. This drop comes even as national milk production rose to 1.93b kgMS.
The increase in collections was driven by early calving and strong pasture growth during the winter, though droughts in Waikato and Taranaki temporarily slowed output during summer. Fonterra still closed the season with a record-setting May collection of 104.1m kgMS, 8% higher than the same month last year. The current payout forecast is NZ$10/kgMS, with a range of NZ$9.70–10.30/kgMS—potentially a new record high for farmers.
Anne Douglas, Fonterra’s director of farm source, credited the production boost to a combination of favorable weather and improved farm practices, such as genetic gains and high animal welfare standards. Despite localized drought conditions, the season was broadly positive for dairy producers and is seen as a good sign for the broader industry and economy.
In Australia, Fonterra’s May collections edged up by 0.6% to 8.6m kgMS, supported by solid pasture growth in northern and eastern Victoria. However, western regions and Tasmania experienced declines due to dry weather. Overall season-to-date collections in Australia were up 1.4%, totaling 101.6m kgMS. With 650 farmers across multiple states, Fonterra is continuing to evaluate strategic divestments in its Australian operations, which are currently up for sale.
Globally, milk production saw modest increases. The EU recorded a 0.7% rise in April, largely fueled by a 12.6% surge in Ireland, while Germany, Belgium, and Romania saw drops. In the U.S., production rose 1.6% year-over-year, driven by higher yields and herd sizes in Idaho, Texas, and Kansas. California, however, posted a 1.6% decline due to ongoing impacts from avian flu, showing that even amid growth, regional vulnerabilities persist.
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