Global Dairy Update January 2018

1
GLOBAL DAIRY
UPDATE
JANUARY 2018
KEY DATES
28 February 2018
Deadline for Application to
Supply Fonterra
Late March 2018
FY18 Interim Results
Announcement
Late May 2018
Q3 Business Update
Announcement
1 June 2018
Measurement Date for Share
Standard 2018/19 Season
• In December, there was a significant
decrease in Fonterra’s New Zealand
milk collections, down 6% compared to
December last year.
• Fonterra’s forecast milk collection in
New Zealand for the 2017/18 season was
lowered to 1,480 million kgMS.
To view the latest Fonterra
GlobalDairyTrade results –
To view charts that
illustrate year-on-year
changes in imports, exports
and production –
To view the latest on
Fonterra milk collection –

2
OUR MARKETS
FONTERRA MILK COLLECTION 2017/18 SEASON
To view a table that shows our
detailed milk collection in New
Zealand and Australia compared
to the previous season –
NEW ZEALAND MILK COLLECTION
VOLUME M LITRESDAY
JUNJULAUGSEPOCTNOVDECJANFEBMARAPRMAY









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NEW ZEALANDNORTH ISLANDSOUTH ISLANDAUSTRALIA
Decrease for the season
from 1 June to 31 December
Decrease for the season
from 1 June to 31 December
Increase for the season from
1 June to 31 December
Increase for the season from
1 July to 31 December
011
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Fonterra’s milk collection
across Australia for the six
months to 31 December
reached 86 million kgMS,
18 million kgMS higher than
last season.
December milk collection
reached 16 million kgMS, 28%
higher than December last
season. Growth continues to
be driven by new suppliers
to the Co-operative and
strong seasonal conditions
across Australia.
North Island milk collection
in December reached
102 million kgMS, 8% behind
December last season.
Dry, hot weather in December
caused the large decrease in
production. Wet conditions in
early January will help in some
regions, however further rain
in the next few weeks will be
needed to see any recovery
in production, particularly
in Waikato, Taranaki and
Central Districts.
South Island milk collection
in December reached 74 million
kgMS, 1% behind December
last season.
Fonterra’s milk collection
across New Zealand for
the seven months to
31 December reached
878 million kgMS, slightly
down on the same period
last season.
Fonterra’s New Zealand milk
collections in December
declined by 10 million kgMS, or
6%, due to dry weather across
the country.
A decrease of 3%
on last season
1,480M
KGMS
In December Fonterra lowered
its forecast milk collection
from 1,525 million kgMS to
1,480 million kgMS, a 3%
decrease on last season’s
collection of 1,526 million kgMS.
Dry weather in early December
significantly impacted soil
moisture and pasture quality
across the country. While the
recent wet conditions have
helped in some regions, it is
unlikely to be enough to bring
production back to previously
anticipated levels.
The forecast Farmgate Milk
Price for the season remains at
$6.40 per kgMS. Off-GDT sales
contributed 3 cents per kgMS
to this forecast Farmgate Milk
Price for the season to date in
the first quarter.
Forecast Fonterra
Milk Collection Across
New Zealand

3
OUR MARKETS
FONTERRA GLOBALDAIRYTRADE RESULTS
Fonterra GDT results at
last trading event
2 January 2018:
5.7
Change in Fonterra’s
weighted average product
price from previous event
%
Fonterra’s weighted
average product price

(USD/MT)
Fonterra product quantity
sold on GDT
3,181
USD
24.3
000’ MT
%%%
%%%
GDT PRICE INDEXNZDUSD SPOT RATE
JAN OCT MAR
JUN
AUG
OCT
JAN MAR MAY AUG JAN




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PRICE INDEX
NZD  USD
Fonterra GDT sales
by destination:
Dairy commodity prices
and New Zealand
dollar trend
The New Zealand dollar has
strengthened over the past
month due to the weakening
US dollar.
The next trading event will be held on 16 January 2018. Visit www.globaldairytrade.info for more information.
NORTH ASIA (INCLUDING CHINA)
SOUTH EAST ASIA
MIDDLE EAST AND AFRICA
LATIN AMERICA
OTHER
USD 2,886/MT
4.8
WMP
USD 1,718/MT
1.8
SMP
USD 4,501/MT
0.6
BUTTER
USD 6,405/MT
0.2
AMF
USD 4,419/MT
1.9
RENNET CASEIN
USD 3,317/MT
2.1
CHEDDAR
24,305
MT
LATEST AUCTION
350,474
MT
FINANCIAL
YEAR‑TO‑DATE
To view more information,
including a snapshot of the
rolling year-to-date results –

4

SUPPLEMENTARY INFORMATION
PRODUCTION
AUSTRALIAAVERAGE
UNITED STATES
NEW ZEALANDEU
NOV JUN MAY APR FEB JAN DEC  AUG OCT SEP JUL MAR 
LIQUID MILK M LITRES











,





EXPORTS
AUSTRALIA
UNITED STATES
NEW ZEALANDEU
JUL JUN MAY MAR FEB JAN DEC NOV OCT SEP AUG APR 
MT s







AVERAGE
IMPORTS
MIDDLE EAST & AFRICALATIN AMERICA
ASIACHINA
NOV JUN MAY MAR FEB DEC JAN AUG OCT SEP APR JUL 
MT s







AVERAGE
Global Dairy Market
The charts on the right
illustrate the year-on-year
changes in imports, exports
and production for a range of
countries that are important
players in global dairy trade.
The absolute size of
the bars represents the
change in imports, exports
or production, relative
to the same period the
previous year.
Averages are shown where
data is complete for the
regions presented.
NOTE: Data for Asia, Middle East and Africa to August, Latin America to September and China to November.
NOTE: Data for EU to September; New Zealand, US and Australia to November.
NOTE: Data for EU, Australia, and US to October, New Zealand to November.
SOURCE: Government milk production statistics/GTIS trade data/Fonterra analysis.

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Fonterra milk
production
The table on the right
shows Fonterra milk solids
collected in New Zealand
and Australia compared
to the previous season.

SUPPLEMENTARY INFORMATION
MILK COLLECTION
(MILLION KGMS)
DECEMBER
2017
DECEMBER

2016
MONTHLY
CHANGE
SEASON-
TO-DATE
2017/18
SEASON-
TO-DATE
2016/17
SEASON-
TO-DATE
CHANGE
Total Fonterra
New Zealand
176.1186.3(5.5%)877.6881.1(0.4%)
North Island101.7111.1(8.4%)546.4553.1(1.2%)
South Island74.475.2(1.2%)331.2327.91.0%
Fonterra Australia16.112.628.0%86.168.026.6%
Fonterra GDT results
This table provides more
information on the latest
results, including a snapshot
of the year-to-date results.
Fonterra GDT Results
This chart shows Fonterra
GDT prices and volumes over
the past 12 months.
LAST TRADING EVENT
(2 JANUARY 2018)
YEAR-TO-DATE

(FROM 1 AUGUST 2017)
Quantity Sold on GDT
(Winning MT)
24,305350,474
Change in Quantity Sold on GDT
over same period last year
14.3%10.8%
Weighted Average Product Price
(USD/MT)
3,1813,220
Change in Weighted Average
Product Price over same period
last year
(10.6%)3.0%
Change in Weighted Average
Product Price from previous event
5.7%–
WEIGHTED AVERAGE PRICEQUANTITY SOLD
JAN
DEC
SEP
AUG
OCT
APR
MAY
FEB
JUN
NOV
JUL
MAR

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WEIGHTED AVERAGE PRICE USDMT
QUANTITY SOLD  MT

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GLOSSARY
AMF
Anhydrous Milk Fat.
BMP
Butter Milk Powder.
DIRA
Dairy Industry Restructuring
Act 2001 (New Zealand).
Farmgate Milk Price
The price for milk supplied in
New Zealand to Fonterra by
farmer shareholders.
Fluid and Fresh Dairy
The Fonterra grouping
of fluid milk products
(skim milk, whole milk
and cream – pasteurised
or UHT processed),
concentrated milk products
(evaporated milk and
sweetened condensed milk)
and yoghurt.
GDT
GlobalDairyTrade, the
online provider of the twice
monthly global auctions of
dairy ingredients.
kgMS
Kilogram of milk solids, the
measure of the amount of
fat and protein in the milk
supplied to Fonterra.
LME (Liquid Milk
Equivalent)
A standard measure of the
amount of milk (in litres)
allocated to each product
based on the amount of fat
and protein (“milk solids”) in
the product relative to the
amount of fat and protein in
a standardised raw milk.
Non-Reference Products
All dairy products, except
for Reference Products,
produced by the NZ
Ingredients business.
Reference Products
The dairy products used
in the calculation of the
Farmgate Milk Price, which
are currently WMP, SMP,
BMP, butter and AMF.
Season
New Zealand: A period
of 12 months to 31 May
in each year.
Australia: A period of
12 months to 30 June
in each year.
SMP
Skim Milk Powder.
WMP
Whole Milk Powder.