Fonterra’s asymmetric milk-price range signals risk ahead for NZ farmers.
Infometrics’ June analysis highlights Fonterra’s unprecedented asymmetric opening farmgate milk price forecast for the 2025/26 season. While the midpoint remains at NZ $10/kgMS, the skewed range of NZ $8–$11, with the $10 situated near the top, clearly signals underlying downside risk in global dairy markets.
The widened range—$3 gap versus the usual $1.50—reflects elevated volatility due to global economic uncertainty, shifting dairy supply dynamics, and possible trade disruptions. The stance encourages farmers to plan cautiously around potential price dips.
Despite current strength—with Global Dairy Trade prices up ~12% and NZX spot milk prices near $11/kgMS—recent softening in successive auctions underscores the narrowing safety buffer. Infometrics underlines the need for risk‑aware farm management amid these roller‑coaster conditions.
The asymmetric mid‑point serves a dual purpose: it conveys optimism around potential upside while firmly warning of downside hazards. With global macro headwinds, the forecast encourages resilience and proactive business strategy among dairy producers.
For professionals in dairy economics and supply chains, the message is clear: align forward contracts, tighten cost controls, and maintain strong financial buffers. The $8 floor demands robust stress testing, while the $11 ceiling suggests room for upside. Farmers should build flexible and sustainable plans to weather either scenario.
Source: Infometrics — Chart of the month: Milk price range signals careful balance https://www.infometrics.co.nz/article/2025-06-milk-price-range-signals-careful-balance
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