NZX Farmgate Milk Price Update

·         Milk powder prices have seen strength across the past two months, especially from SMP, however all reference products saw weakness at the most recent GDT 412 event.

·         SMP prices have been trading at a US$80/t premium to WMP.

·         Milkfat prices have felt downward pressure, amidst ample global supply.

·         Demand from North Asia tapered off at the most recent GDT event following solid August purchasing, however the remaining volume was absorbed by Southeast Asia/Oceania.

·         Milk production continues to track higher in key regions, despite heatwaves in the Northern Hemisphere and the threat of a severe El Nino in the Southern Hemisphere. EU and US milk up 2.0% and 1.7% year-on-year respectively for the latest reported months.

·         SGX-NZX milk price futures for 2026-27 have risen to $10.00/kgMS, with both the 2027/28 and 2028/29 contracts also at the $10.00/kgMS mark.

·         The NZX forecast for the 2026-27 season forecast is $10.07/kgMS while Fonterra has revised its FGMP midpoint up 25 cents to $9.50/kgMS as of 21 September 2026.

·         The NZD/USD exchange rate has tracked downward in the past month and is sitting between 56-57 cents, providing a tailwind for milk price forecasts.

·         In their latest milk price forecast, Fonterra announced that 73% of exchange rate risk for the 2026-27 season has been hedged at an average rate of 0.5839.

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.