This week Fonterra announced some key figures, which continues to drive positivity in New Zealand’s leading sector for economic recovery.

FY25 Adjustment

• The midpoint forecast for the 2024/25 season has been increased from NZ$10.00 to NZ$10.15 per kg of milk solids (kgMS).

• The forecast range has also significantly tightened previously $9.70–$10.30, now narrowed to $10.10–$10.20.

With September and October always a tight period for cashflow for Dairy farmers, as calving ramps up and spring milking kicks off. Residual payments play an important role in balancing the books heading into the season ahead, this lift in midpoint provides a welcome boost at the farm gate.  

FY26 Forecast Confirmation

• The opening forecast for the 2025/26 season remains at NZ$10.00 per kgMS.

• The range has been refined from $8.00–$11.00 to $9.00–$11.00.

Fonterra Shareholders Earnings Forecast

• The FY25 earnings guidance remains steady at 65–75 NZ cents per share, announced prior to the deal for its consumer brand.

Sale of Global Consumer Brand

• Fonterra yesterday announced the sale of its Consumer and associated businesses to Lactalis, a French multinational dairy products corporation for $3.845 billion NZD, while the sale is subject to certain conditions, including Fonterra farmer shareholder approval. Fonterra are targeting a tax free capital return of $2.00 dollars per share, over and above the normal earnings forecast. The sale includes long-term agreements for Fonterra to sell milk and ingredients to the purchaser, keeping milk demand in New Zealand, the sale is expected to take place in Q1 of 2026. While the headline is positive for shareholders, there will undoubtably be questions as to what the future holds for Fonterra post sale before the vote comes around in October.

• Fonterra Coop (FCG) shares closed yesterday at $6 (+ 19.52% for the day), with the Shareholders Fund (FSF) closing at $7.15 (+2.73% for the day).

OCR Announcement

• This weeks decision to lower the OCR by -25 basis points to 3.00% was welcome news for many around the country. Of equal importance was the Reserve banks tone, signaled that further cuts are likely, with some policymakers favoring a larger 50‑basis‑point reduction to come.
• The move saw the NZD down against the USD, down -1.94% this week, with the Agri sectors reliance on imports for things like fertiliser and fuel, cost base increases may come into play, however the weaker dollar will benefit export demand from global buyers.

If you would like to discuss these results, or to discuss how Agricultural investments might work for you, please feel free to reach out to the team at Seedling today.

‍