Stronger milk collections in New Zealand and Australia contrast with softer import demand and major corporate changes at the co-op.
Fonterra Co-operative Group reported stronger global milk production through January and February, with output increasing across the main exporting regions. Milk production rose 6.0% in New Zealand in February, while the United States posted a 2.9% gain. European Union output increased 5.2% in January and Australia recorded a 1.5% rise, pointing to a more abundant global milk supply.
Dairy export performance was uneven. New Zealand exports rose just 0.3% in February, while the European Union increased shipments by 3.2% and the United States expanded exports by 12.6%. Australia, however, saw exports fall 2.0%. At the same time, import demand weakened across Latin America, Asia, the Middle East, Africa and China, with Chinese dairy imports dropping 14% year-on-year in February, reinforcing concerns about slower global demand for dairy products.
Within its own business, Fonterra delivered stronger milk collections in both New Zealand and Australia. February collections in New Zealand climbed 7.1% to 143.2 million kgMS, taking season-to-date volumes to 1.22 billion kgMS, up 3.1% on the previous season. Australian collections rose 3.4% to 8.4 million kgMS for the month, lifting season-to-date intake to 78.4 million kgMS. Despite the mixed demand outlook, the co-op maintained its 2025/26 Farmgate Milk Price forecast at NZ$9.40 to NZ$10.00 per kgMS.
The co-operative also confirmed a major strategic shift following the completion of the sale of its Mainland Group to Lactalis on March 31. Fonterra said the transaction would enable a NZ$3.2 billion return to farmer shareholders and unit holders through a NZ$2.00 per share capital payment. The sale is designed to sharpen the company’s focus on its core business as a farmer-owned, global business-to-business dairy supplier, while earnings guidance for continuing operations remains unchanged at 50 to 65 cents per share.
Leadership changes are also underway. Chief executive Miles Hurrell announced he will step down after 25 years with the company, including eight years as CEO. Chair Peter McBride credited Hurrell with rebuilding farmer confidence and improving the co-op’s financial discipline. Hurrell will remain in the role during a six-month transition period while the board searches for his successor. Meanwhile, the latest Global Dairy Trade auction showed average prices edging 0.2% higher to US$4,476 per metric tonne, although geopolitical tensions in the Middle East continue to create uncertainty in financial and dairy markets.
Source: BusinessDesk – https://businessdesk.co.nz/article/primary-sector/fonterra-reports-stronger-milk-collections
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