NZX Farmgate Milk Price Update

·         Milk powder prices have fallen in the past two months, however have stabilised as of the most recent GDT auction.

·         SMP prices saw especially large price movements downward in line with falling US and EU origin prices in June.

·         Milkfat prices continue to be volatile, with butter prices down from the start of June.

·         Demand from key regions has been choppy, with Southeast Asia/Oceania continuing to do much of the heavy lifting in recent GDT events.

·         Milk production continues to track higher globally, with EU and US milk up 2.4% and 2.3% respectively year-on-year for the latest reported months, and NZ is continuing to see record production figures.

·         SGX-NZX milk price futures for 2026-27 have moved downwards to $9.55/kgMS, whilst Fonterra announced a downgrade of their FGMP forecast from $9.75/kgMS to $9.25/kgMS.

·         The NZX forecast for the 2026-27 season is currently $9.78/kgMS.

·         The NZD/USD exchange rate has been tracking between 56 and 59 US cents since June.

·         In their most recent forecast update, Fonterra announced that 58% of exchange rate risk for the 2026-27 season has been hedged at an average rate of 0.5907.

The top chart shows the components that inform the NZX Milk Price Calculator and how they changed between the most recent update and the previous update. Revenue figures are estimated using SGX-NZX Ingredients Futures. The bottom chart shows a historic view of Fonterra FGMP updates through the last three seasons as well as the NZX forecast for this season.