NZX Farmgate Milk Price Update

• Milk powder prices have been elevated over the past two months (especially SMP), although prices faltered slightly at the most recent GDT event.
  
  
• WMP prices have been rangebound between US$3,600/MT and $3,800/MT since March.
  
  
• Milkfat prices have been volatile, seeing large increases at GDT 405.
  
  
• Demand from North Asia dropped off sharply at the most recent GDT event, however the remaining volume was absorbed by Southeast Asia/Oceania.
  
  
• Milk production continues to track higher in key regions, with EU and US milk up 4.2% and 2.7% year-on-year for the latest reported months.
  
  
• SGX-NZX milk price futures for 2026-27 have moved downwards to $9.71/kgMS, whilst Fonterra announced an opening FGMP forecast at $9.75/kgMS, albeit with another very wide range between $8.00 and $11.00.
  
  
• The NZX forecast for the 2026-27 season forecast is $9.75/kgMS.
  
  
• The NZD/USD exchange rate has been tracking between 58 and 60 US cents since April.
  
  
• In their opening milk price forecast, Fonterra announced that 46% of exchange rate risk for the 2026-27 season has been hedged at an average rate of 0.5948.

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.