Global dairy demand is holding up even as all the main exporting regions produce more milk, Fonterra chief executive Richard Allen said as the co-operative released its 2026 financial result, Farmers Weekly NZ reports.

Fonterra's operating profit rose to $3.4 billion from $1.7 billion a year earlier. Its ingredients business earned $1.293 billion, helped by strong global protein demand, pricing and product mix, and food service $547 million. The co-op is still adjusting after selling its consumer business, including setting up its relationship with Lactalis.

For the 2026-27 season Fonterra forecasts milk collections just above 1.6 billion kg of milk solids and a farmgate milk price of $9.50/kg MS, within a range of $8.50 to $10.50, with an organic forecast of $14.30 within $13.30 to $15.30.

Allen said a hot, dry summer in Europe is starting to take milk off, while demand stays robust in Southeast Asia and the Middle East and protein demand grows in Europe and the US. "Global demand for protein is no longer just a fad but a long-term trend," he said.

The co-op is planning for another season of strong supply but is mindful of El Niño. Chair Peter McBride said there is plenty of stored feed on farms and farmers adapt well, but "it's just the severity and the length of it that's unknown."

Photo: Ingolfson / Wikimedia Commons (Public domain)

Source: Farmers Weekly NZ