Fonterra has lowered its farmgate milk price forecast for the 2026/27 season, citing softer-than-expected global demand and strong international supply. The dairy co-operative narrowed its forecast range to $8.00 - $10.50 per kilogram of milk solids (kgMS), from an original range of $8.00 - $11.00. The midpoint of the forecast was reduced by 50 cents to $9.25 per kgMS.
CEO Richard Allen attributed the revision to an 11% drop in Global Dairy Trade (GDT) auction prices since the opening forecast was announced in May. This price decline has been driven by increased milk production from key exporting regions, which has outpaced current demand. The forecast for the recently completed 2025/26 season remains unchanged.