Fonterra Hits Record Allocation in Fixed Milk Price Programme

Highlights:

• Record Allocation: Fonterra Co-operative Group Limited (NZX: FCG) allocated 120 million kgMS under its Fixed Milk Price programme, the highest since its launch in 2019.
• Production Share: The allocation represents 8% of Fonterra’s forecast production of 1.49 billion kgMS for the current season.
• Income Certainty: The Fixed Milk Price tool allows farmers to lock in prices for up to 50% of their milk production, ensuring greater financial stability amid price volatility.

Fonterra Co-operative Group Limited (NZX: FCG) has achieved a record allocation under its Fixed Milk Price (FMP) programme, with 120 million kilograms of milk solids (kgMS) secured for the current season. This marks the highest allocation since the initiative's launch in 2019.

Fixed Milk Price Gains Popularity

The FMP programme allows farmers to fix the price of up to 50% of their milk production, providing greater income stability amid fluctuating dairy prices. The record 120 million kgMS allocated this year accounts for 8% of Fonterra’s forecast production of 1.49 billion kgMS for the current season.

This milestone coincides with record-high farmgate milk payouts, underscoring the tool's value in helping farmers manage risk while securing more predictable income.

Supporting Farmer Certainty

Fonterra's Fixed Milk Price tool was introduced to give farmers a buffer against price volatility. By locking in prices for a portion of their production, farmers can plan ahead with greater financial certainty.

This year’s strong uptake reflects both current price levels and farmers' strategic use of the programme as global dairy markets remain dynamic.

Outlook for the Season

Fonterra’s significant production forecast of 1.49 billion kgMS highlights the co-operative’s robust output. While international dairy demand and pricing continue to fluctuate, tools like the FMP enable Fonterra's suppliers to secure pricing at favorable levels. At the time of writing, the record allocation reaffirms growing farmer confidence in the Fixed Milk Price programme as a reliable risk management strategy in the dairy industry. Fonterra's ability to support farmers through innovative tools like the Fixed Milk Price programme reflects its commitment to providing stability in an otherwise volatile sector.

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