Fonterra Co-operative Group Ltd haslifted its forecast Farmgate Milk Price for the 2025/26 season and narrowed its forecast range on February 20.

The midpoint has increased from $9.00 per kgMS to $9.50 per kgMS, with the forecast range lifting and narrowing from $8.50-$9.50 per kgMS to $9.20-$9.80 per kgMS.

Fonterra chief executive officer Miles Hurrell said the co-op has been able to make these changes based on recent improvements in global commodity prices combined with Fonterra's well contracted sales book.

"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," Hurrell said.

"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."

Fonterra is also advising that it intends to pay out 100% of underlying earnings generated by Mainland Group during FY26 while still under Fonterra ownership.

The earnings will be distributed through a special Mainland dividend payment to shareholders and unit holders following the completion of the sale to Lactalis.

"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," Hurrell said.

"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."

As previously indicated, Fonterra expects the transaction to be complete in the first quarter of the 2026 calendar year, subject to separation of the businesses from Fonterra and remaining regulatory approvals being received.

- Fonterra

Fonterra provides Farmgate Milk Price and earnings update

Related Articles

Fonterra revises 2026/27 forecast Farmgate Milk Price

Fonterra announces interim leadership changes

Fonterra delivers another strong result for FY2026