New Zealand dairy co-operative Fonterra has made up the earnings lost with the sale of its Mainland consumer business to Lactalis in one year instead of the three it had targeted, Farmers Weekly NZ reports from its 2026 financial results.

Operating profit rose 24% to NZ$1.8 billion, ahead of the NZ$1.7bn target set for FY2028. Group after-tax profit doubled to NZ$2.6bn, and underlying profit after tax was NZ$1.2bn, or 71 cents a share, up 17 cents. Revenue was NZ$27bn on a record volume of milk collected, processed and sold, and return on capital reached 14.2%, well above the 10-12% target. Net debt fell by nearly NZ$1bn to NZ$1.7bn.

Shareholders received total cash returns of NZ$19.6bn in the year: a milk price of NZ$9.69 per kg of milksolids, dividends of 73 cents a share including the 16-cent special Mainland dividend, and a NZ$3.2bn capital return, a total of NZ$12.42/kgMS across 1.6 billion kg.

Milk collections rose 4.1%, and average production per farm reached 194,000 kg of milksolids, up from 183,000. Fonterra will invest an extra NZ$1bn in the South Island over the next three years to expand protein manufacturing and improve its environmental performance.

"This additional investment will help us move more milk from whole milk powder and commodities into high-value products," chief executive Richard Allen said, pointing to growing demand for sustainably produced, protein-rich foods.

Photo: Ingolfson / Wikimedia Commons (public domain)

Source: Farmers Weekly NZ