Fonterra Co-operative Group Ltd has lifted its forecast Farmgate Milk Price for the 2025/26 season, increasing the midpoint from $9.00 per kgMS to $9.50 per kgMS. The forecast range has also been raised and narrowed, moving from $8.50-$9.50 per kgMS to $9.20-$9.80 per kgMS.
Chief Executive Miles Hurrell said the changes reflect stronger global commodity prices and a solid sales position.
“As we have seen, global dairy prices have been volatile across the season. Following the declines at the end of 2025, prices have lifted in the last four Global Dairy Trade events.
“Global milk production remains above seasonal norms, meaning the risk of further volatility in pricing remains. As such, we continue to take a balanced approach with our Farmgate Milk Price forecast.
“Our team is focused on enhancing returns for farmer shareholders through the Farmgate Milk Price and earnings, by delivering on our strategy,” says Mr Hurrell.
Fonterra also confirmed it plans to distribute 100 per cent of underlying earnings generated by Mainland Group during FY26 while it remains under Fonterra ownership. The payment will be made as a special Mainland dividend to shareholders and unit holders once the sale to Lactalis is complete.
“We are currently finalising our interim accounts and can indicate that we expect the special Mainland dividend to be in the range of 14-18 cents per share, which reflects the operating performance of the Mainland business during the first half of this year driven by ongoing cost management and favourable input commodity prices.
“This remains subject to the settlement date of the transaction and the finalisation of our financial statements and audit process.
“Fonterra’s FY26 forecast earnings guidance from continuing operations remains unchanged at 45-65 cents per share. It is intended that Fonterra’s dividend policy will be applied to these continuing earnings.
“Our interim dividend from continuing operations will be confirmed when we release our FY26 interim results and an update on the special Mainland dividend will be given at this time,” says Mr Hurrell.
In a further development, farmer shareholders have approved the capital return scheme linked to the divestment of Fonterra’s global Consumer and associated businesses. At a virtual Special Meeting, 98.85 per cent of votes cast supported the proposal.
The Co-operative will now seek final Court approval to proceed with the $2.00 per share capital return, subject to completion of the Mainland Group sale. The transaction is expected to close in the first quarter of the 2026 calendar year, pending business separation and regulatory approvals.