Global Market Insights

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• The December GDT auctions saw significant volatility and declines for ingredients prices, with WMP sinking from around $3,500/MT to $3,150/MT and milk fats seeing even larger declines.

• These declines were driven by oversupply in global dairy markets as milk production increased substantially year-over-year in NZ, EU and US.

• This resulted in declines for SGX-NZX milk price futures with daily settlement dipping as low as $9.00/kgMS for the current season, while 2026-27 futures dipped close to the $8.00/kgMS.

• GDT prices rebounded in the first auction in January as Middle Eastern buyers stepped in to lift prices above market expectations.

• Milk prices have lifted to start the year with current season futures last settling at $9.41/kgMS and the NZX forecast sitting at $9.53/kgMS.

• The NZD/USD exchange rate has seen minimal change over the past two months with no effect on milk price and we expect that 85% of USD cashflows for the season will already be hedged.

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.