Global Dairy Update June 2018

1
GLOBAL DAIRY
UPDATE
JUNE 2018
KEY DATES
Late September 2018
FY18 Annual Results
Announcement
12 November 2018
Fonterra Shareholders' Fund
Annual Meeting
1 December 2018
Compliance Date for Share
Standard 2018/19 Season
December 2018
FY19 Q1 Business Update
• New Zealand production up 6% in May
compared to previous year. Australia, Europe
and the US also up low single-digit.
• US, New Zealand and Australian exports
show double-digit growth for the month.
European exports remain on the rise.
• Latin America, Asia and China show steady
import growth. Growth in Middle East and
Africa accelerates in February.
• Fonterra's New Zealand milk collection
for the season ended 31 May 2018 was
1,505 million kgMS, down 1% on last season.
• Forecast Fonterra milk collection in
New Zealand for the 2018/19 season is
1,525 million kgMS, up 1.3% on 2017/18.
• Fonterra is bringing its dairy goodness to online consumers
in Southeast Asia for the first time through a new partnership
with Lazada, the leading online shopping destination in
the region.
• It’s an oldie but a goodie – Tip Top’s Boysenberry Ripple has
taken out the supreme award at the New Zealand Ice Cream
awards for the fourth time.
• Minimum shareholding requirement for farmer shareholders.
• Climate change ambassadors to show the way.

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To view a chart that
illustrates year-on-year
changes in production –
2
OUR MARKETS
GLOBAL PRODUCTION
NEW  ZEALAND
PRODUCTION UP 6%
IN MAY COMPARED TO
PREVIOUS YEAR. AUSTRALIA,
EUROPE AND THE US ALSO UP
LOW SINGLE-DIGIT
Total New Zealand milk
production increased 6%
in May compared to the
same period last year on the
back of favourable autumn
weather conditions in both
the North and South Island.
For the 12 months to May,
milk production was flat
compared to the same
period last year.
Fonterra collections have
been reported for May, see
page 5 for details.
Australia milk production
increased 4% in April
compared to the same
period last year, largely due
to favourable conditions in
the four key dairy regions.
Production for the 12 months
to April was up 3% compared
to the same period the
previous year.
This increase was driven
by south east Australian
production, in particular
Victoria and Tasmania .
Fonterra collections
in Australia have been
reported for May, see page 5
for details.
EU milk production
increased 1% in April
compared to the same
period last year, driven by
continued strong European
dairy prices.
This growth was primarily
driven by Germany and
Poland up 3%, facilitated
by good weather
conditions. This growth
was partially dampened by
a combined 3% decline in
the United Kingdom and
Ireland as a consequence of
delayed grass growth and
feed shortages.
Production for the 12 months
to April was up 3% compared
to the same period the
previous year.
US milk production
increased 1% in March
compared to the same
period last year.
The US continues to grow
production per cow with
March seeing an average
10kg per cow increase, above
March 2017 levels in the 23
major dairy-producing states.
Milk production for the 12
months to March increased
by 2% compared to the same
period the previous year.
NEW ZEALANDAUSTRALIAEUROPEAN UNIONUSA
Production change
for the 12 months to
April 2018
Production change
for the 12 months to
May 2018
Production change
for the 12 months to
April 2018
Production change

for the 12 months to
March 2018
0323
%

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illustrates year-on-year
changes in exports –
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3
OUR MARKETS
GLOBAL EXPORTS
US, NEW ZEALAND AND
AUSTRALIAN EXPORTS SHOW
DOUBLE-DIGIT GROWTH FOR
THE MONTH. EUROPEAN
EXPORTS REMAIN ON
THE  RISE
Total New Zealand dairy
exports increased 10%,
or 25,000 MT, in April
compared to the same
period last year.
This growth continues to be
driven by WMP, which was
up 12,000 MT. In addition,
AMF, infant formula and
butter were up a combined
26%, or 11,000 MT, for
the month.
Exports for the 12 months
to April were up 1%, or
38,000 MT, on the previous
comparable period.
This increase was primarily
due to WMP and fluid and
fresh dairy, up a combined
123,000 MT, partially offset
by declines in AMF, MPC
and MPI, and cheese down a
combined 83,000  MT.
EU dairy exports increased
by 4%, or 14,000 MT, in
February compared to the
same period last year.
Growth was seen across the
majority of export categories,
in particular infant formula
and SMP up a combined 19%,
or 19,000 MT. However a
decline of 11%, or 12,000  MT,
was seen in the largest
category, fluid and fresh dairy.
Exports for the 12 months
to February were up 7%,
or 341,000 MT, on the
previous comparable period.
SMP continues to be the
primary driver, up 40%,
or 225,000 MT. Growth
continues to be seen across
most of the export categories
except for caseinate and
butter, down a combined
53,000 MT, or 23%.
US dairy exports increased
by 31%, or 57,000 MT, in
April compared to the same
period last year on the back
of high domestic production.
Exports were up for the sixth
consecutive month led by
the following categories:
SMP, WPC and WPI, lactose
and cheese.
Exports for the 12 months
to April were up 8%, or
173,000 MT, on the previous
comparable period.
Growth was seen across
most categories apart from
fluid and fresh dairy which
was down 8,000 MT. Cheese,
SMP and whey powder saw
the biggest gains, adding
54,000 MT, 37,000 MT and
31,000 MT, respectively.
Australia dairy exports
increased 16%, or 9,000  MT,
in April compared to the
same period last year. This
was led by increases in
most export categories, in
particular SMP and WMP,
which were up a combined
7,000  MT.
Exports for the 12 months
to April were up 5%, or
37,000 MT, on the previous
comparable period.
Fluid and fresh dairy,
SMP and infant formula
made up the majority
of the increase, adding
a combined 64,000  MT.
These gains were offset by
declines in butter, whey
powder and WMP which
were down a combined
19%, or 23,000 MT, for the
12 months to April.
NEW ZEALANDAUSTRALIAEUROPEAN UNIONUSA
85
1
7
Export change for the 12
months to April 2018
Export change for the 12
months to April 2018
Export change for the 12
months to April 2018
Export change for the 12
months to February 2018

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%
To view a chart that
illustrates year-on-year
changes in imports –
4
OUR MARKETS
GLOBAL IMPORTS
LATIN AMERICA, ASIA AND
CHINA SHOW STEADY IMPORT
GROWTH. GROWTH IN
MIDDLE EAST AND AFRICA
ACCELERATES IN  FEBRUARY
Latin America’s dairy
import volumes¹ increased
4%, or 5,000 MT, in February
compared to the same
period last year. This was
driven by SMP, cheese and
lactose up a combined 14%,
or 10,000 MT. These gains
were partially offset by
combined declines in WMP
and AMF of 6,000  MT.
Imports for the 12 months to
February were up 3,000 MT
compared to the same
period the previous year.
Increases in SMP, cheese and
whey powder of a combined
98,000 MT for the 12 months
to February, were dampened
by a large decline in WMP of
93,000  MT.
Asia (excluding China)
dairy import volumes¹
increased 1%, or 5,000  MT,
in February compared to the
same period last year. This
was driven by continued
growth in WMP and fluid
and fresh dairy, up 9,000 MT
and 4,000 MT, respectively.
Imports for the 12 months
to February were up 1%,
or 31,000 MT, compared
to the same period the
previous year. This was
primarily driven by cheese
and WMP, up a combined
89,000 MT, partially offset by
a continuing decline in Asia’s
SMP category, which for the
12 months to February is
down 42,000  MT.
Middle East and Africa
dairy import volumes¹
increased 8%, or 26,000  MT,
in February compared to the
same period last year. This
was driven by significant
increases in most categories,
especially SMP, infant
formula and cheese up 42%,
50% and 14%, respectively.
Imports for the 12 months
to February were up 2%, or
70,000 MT, compared to the
same period the previous
year. SMP, cheese and fluid
and fresh dairy categories
gained 139,000 MT
combined. This was partially
offset by a large decline in
WMP of 65,000  MT.
China dairy import
volumes increased 3%,
or 7,000 MT, in March
compared to the same period
last year. This was driven by
a combined 14,000 MT, or
22%, growth in fluid and
fresh dairy, butter and lactose
categories. Declines in WMP
of 6,000 MT partially offset
this growth.
Imports for the 12 months to
March were up 394,000 MT
compared to the same period
last year. Strong demand
out of China continues
with imports across all
key categories up for the
period. Infant formula, WMP
and SMP imports added a
combined 220,000 MT of
additional volumes.
LATIN AMERICAASIAMIDDLE EAST & AFRICACHINA
Import change for the 12
months to March 2018
Import change for the 12
months to February 2018
Import change for the 12
months to February 2018
Import change for the 12
months to February 2018
117
2
0
1 Estimates are included for those countries that have not reported data.

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To view a table that shows our
detailed milk collection in New
Zealand and Australia compared
to the previous season –
VOLUME M LITRESDAY
JUNJULAUGSEPOCTNOVDECJANFEBMARAPRMAY









5
OUR MARKETS
FONTERRA MILK COLLECTION 2017/18 SEASON
NEW ZEALANDNORTH ISLANDSOUTH ISLANDAUSTRALIA
Decrease for the 2017/18
season compared to the
previous season
Decrease for the 2017/18
season compared to the
previous season
Increase for the 2017/18
season compared to the
previous season
Increase for the season from
1 July to 31 May
311
25
NEW ZEALAND MILK COLLECTION
Fonterra’s milk
collection across
Australia for the 11
months to 31 May
reached 144 million
kgMS, 29 million kgMS
higher than last season
In May milk collection
reached 12 million kgMS, 17%
ahead of the same month
last season.
Although autumn conditions
have been variable across
key milk supply regions,
conditions remain favourable
for sustained milk growth for
the balance of the season.
North Island milk
collection for the
2017/18 season was down
3% compared to the
previous season.
This decline was driven
primarily by Taranaki
down 10%, on the back of
extremely poor weather
conditions throughout
the season.
May collections reached
35 million kgMS, 8% above
the same month last season.
South Island milk
collection for the 2017/18
season was up 1% compared
to the previous season.
Favourable conditions across
Canterbury, Otago and
Southland for most of the
season drove the increase.
Otago and Southland
had their highest peak
ever, as a result of good
spring conditions, along
with a strong autumn
for Canterbury.
May collections reached
36 million kgMS, 6% above
the same month last season.
Fonterra’s milk
collection across
New Zealand for
the 2017/18 season
reached 1,505 million
kgMS, 1% behind the
2016/17 season.
Difficult weather conditions
were the prevailing theme
for this season. Extremely
wet conditions in spring
caused pasture damage,
stunting both grass growth
and supplementary feed
production, followed by
difficult dry conditions which
kept pasture growth low
across the season.
May collections were
71 million kgMS, 7% above
the same month last season
on the back of favourable
autumn conditions in
most regions.

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To view more information,
including a snapshot of the
rolling year-to-date results –
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6
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GDT PRICE INDEXNZDUSD SPOT RATE
JUL APR 
SEP 
NOV 
JAN APR JUN SEP NOV FEB 
JUN 





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PRICE INDEX
NZD  USD
OUR MARKETS
FONTERRA GLOBAL DAIRY TRADE RESULTS
Fonterra GDT sales
by destination:
Dairy commodity prices
and New Zealand
dollar trend
The New Zealand dollar
was volatile in May, falling
for most of the month on
renewed global uncertainty,
before recovering late in
the month.
Fonterra GDT results at
last trading event
19 June 2018:
The next trading event will be held on 3 July 2018. Visit www.globaldairytrade.info for more information.
Change in Fonterra’s
weighted average product
price from previous event
0.7
Fonterra’s weighted
average product price

(USD/MT)
3,591
USD
Fonterra product quantity
sold on GDT
000’ MT
20.5
NORTH ASIA (INCLUDING CHINA)
SOUTH EAST ASIA
MIDDLE EAST AND AFRICA
LATIN AMERICA
OTHER
USD 5,611/MT
0.5
BUTTER
USD 2,071/MT
0.4
SMP
USD 3,189/MT
0.5
WMP
USD 4,898/MT
2.3
RENNET CASEIN
USD 6,060/MT
2.6
AMF
USD 3,847/MT
3.8
CHEDDAR
20,455
MT
LATEST AUCTION
559,782
MT
FINANCIAL
YEAR‑TO‑DATE

Fonterra and Lazada
join forces to bring dairy
goodness online
This is Fonterra’s first
partnership with an
e-commerce company in
Southeast Asia and will see
the dairy co-operative’s
well-loved products, such
as Anmum™, Fernleaf™
and Anchor™, made
available through Lazada to
560 million consumers in
six countries – Indonesia,
Malaysia, the Philippines,
Singapore, Thailand
and Vietnam.
The collaboration includes
an agreement for Lazada
to be the exclusive online
distributor of Anchor™
Full Cream Milk Powder in
Indonesia, marking Anchor™
milk’s debut in the market.
Anindya Dasgupta, Global
Chief Marketing and Sales
Officer, Fonterra, said, “Our
relationship with Lazada is a
key milestone in our journey
to share the goodness of
dairy with more people
around the world, and grow
dairy consumption across
Southeast Asia.
“Consumers in Southeast
Asia are becoming more
discerning as their incomes
grow, demanding more
nutritious and high-quality
foods, and using technology
more widely in their daily
lives. This means more
consumers are shopping
online for essentials such
as dairy.
“We are delighted to
partner with Lazada to seize
opportunities in shifting
consumer behaviour and
drive greater reach of our
dairy nutrition.”
The collaborative partnership
involves leveraging analytics
to better understand
consumer insights, test
out markets and products
most suited for the online
environment, and drive new
innovations in marketing.
Lazada Group Chief Business
Officer, Robin Mah said,
“We are thrilled to be the
first e-commerce partner in
Southeast Asia to Fonterra,
a global leader in dairy
nutrition. It is a recognition
of the consumers in
Southeast Asia, the
importance of understanding
their unique needs and
engaging them. It also
reflects the trust that brands
like Fonterra have in Lazada
as the choice platform to
build their brand reach,
customer engagement, and
e-commerce business in
the region.
“We look forward to working
closely together to make
it simple and convenient
for consumers to enjoy
Fonterra’s high-quality
dairy products and help
to meet families’ evolving
shopping needs.”
A classic stands the test
of time – Boysenberry
Ripple scoops
awards again
The Kiwi favourite first hit
the freezers in the 1960s and
since then has fast become
a regular at ice cream scoop
parlours and in dessert
bowls. It has consistently
been in one of the top selling
tubs of ice cream since then.
It’s jammed packed with
fresh fruit, with over
90 metric tonnes of sun
ripened boysenberries from
Nelson used in Tip Top’s
Boysenberry Ripple and
Boysenberry Trumpets,
every year.
Tip Top Director
Kim Ballinger says the
combination of a great team
and quality ingredients,
including New Zealand
fresh milk and cream, is a
winning one.
“We’re proud that Kiwis
continue to love Boysenberry
Ripple after more than
50 years. We reckon it
brings together the best of
New Zealand.
“Our ice cream contains
great tasting fresh
ingredients, and natural
colours and flavours. It’s
fantastic to see our efforts
being recognised for
award-winning taste!”
And while classic flavours
like Boysenberry Ripple
continue to stand the test
of time, the team is working
hard to come up with new
flavours to tempt Kiwi
taste buds.
“We’re flat out testing a
range of new varieties for
next summer and we think
New Zealanders will be as
excited as we are about
what’s in store.”
Tip Top also won the Best
in Category and Gold for its
Creamy Vanilla, and Goody
Goody Gum Drops and
Hokey Pokey were awarded
gold medals.
7
OUR PERFORMANCE

Climate change
ambassadors to show
the way
“We’re selling world-leading
food products and we need
New Zealanders on board with
us to have a social licence to
operate. We need to do what’s
right by New Zealanders, what’s
right by the environment and
what’s right by our Co-op.”
This is the view of Taranaki
sharemilker, Trish Rankin,
one of 15 Dairy New Zealand
Climate Change ambassadors
who will work with their
rural communities to help
farmers better understand the
challenge of climate change.
“I want to break the concept
that climate change is scary
and turn it into positive action,”
says Trish.
“My role is to help my fellow
farmers understand how they
can play a role in reducing
the impact of climate change.
We must acknowledge that
each region is different and
requires different actions
but also recognise the good
practices farmers already
do to help mitigate climate
change. Taranaki started
riparian planting years ago so
we are looking pretty plush
and now able to focus on our
next actions.”
The 2017 Healthy Waterways
report, published in October,
recorded Taranaki’s best
healthy stream trends in
21 years, showing water
quality improving in the
region. This was attributed
to farmers robust Riparian
Management Programme.
“It’s a step toward ensuring
we have a (social) licence to
operate,” says Trish.
The 15 ambassadors – four
women and 11 men – represent
best environmental farming
practices and will help farming
communities future proof their
business, according to DairyNZ
Chief Executive Tim Mackle.
“They run their farms profitably
and sustainably and are serious
about reducing on farm
greenhouse gas emissions,”
he says.
“Emission reduction is a
challenge the entire global
food sector is facing and
New Zealand is well placed
to showcase our sustainable
dairying to the world.
“New Zealand is already one of
the lowest emission producers
of dairy in the world. But for
New Zealand to achieve its
2030 target, we must look at
ways to reduce all gases across
all sectors,” says Tim.
The Climate Change
Ambassadors are located
around New Zealand with
13 of the 15 positions held by
Fonterra farmers.
8
OUR CO-OP
Minimum Shareholding
Requirements for
Farmer Shareholders
At the commencement of
each season (1 June), or shortly
after, farmers are advised of
their minimum shareholding
requirements for that season.
They need to be compliant by
1 December
A farmer shareholder’s
minimum shareholding
requirement is generally based
on the average of their farm’s
prior three seasons’ actual
production, adjusted for any
milk supplied under contract.
The opening minimum
shareholding requirements
for the 2018/19 season
decreased to 1,391 million
shares, 28 million lower than
the opening 2017/18 minimum
shareholding requirements.
SHAREHOLDING REQUIREMENTS FOR CURRENT AND PRIOR SEASON
FIGURES IN MILLIONS
UNLESS OTHERWISE STATED
2017/18 SEASON
OPENING BALANCE
AT JUNE 2017
2018/19 SEASON
OPENING BALANCE
AT JUNE 2018
Minimum shareholding requirement1,4191,391
Vouchers that count towards the minimum shareholding4745
Dry shares held by farmer shareholders¹111141
Units issued by the Fonterra Shareholders’ Fund124125
Total shares on issue1,6071,612
Dry shares held by farmer shareholders (% of shares
on issue)
6.9%8.7%
Fonterra Shareholders’ Fund size (% of shares on issue)7.7%7.8%
1 Dry shares are calculated as shares on issue less minimum shareholding less units issued by the Fonterra Shareholders’ Fund, plus vouchers.

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














,









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








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








AVERAGE
9

SUPPLEMENTARY INFORMATION
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 and Latin America to February; China to March.
NOTE: Data for EU to February; New Zealand, US and Australia to April.
NOTE: Data for US to March; EU and Australia to April and New Zealand to May.
SOURCE: Government milk production statistics/GTIS trade data/Fonterra analysis.

WEIGHTED AVERAGE PRICEQUANTITY SOLD
APR 
MAR 
DEC NOV JAN 
JUL AUG MAY
SEP FEB 
OCT JUN 

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WEIGHTED AVERAGE PRICE USDMT
QUANTITY SOLD  MT
10

SUPPLEMENTARY INFORMATION
Fonterra milk
production
The table on the right
shows Fonterra milk solids
collected in New Zealand
and Australia compared
to the previous season.
MILK COLLECTION
(MILLION KGMS)
M AY
2018
M AY

2017
MONTHLY
CHANGE
SEASON-
TO-DATE
2017/18
SEASON-
TO-DATE
2016/17
SEASON-
TO-DATE
CHANGE
Total Fonterra
New Zealand
70.966.56.6%1,505.11,525.7(1.4%)
North Island34.832.37.8%892.0915.7(2.6%)
South Island36.134.25.5%613.1610.00.5%
Fonterra Australia11. 810.017.0%143.6114.825.0%
Fonterra GDT results
This table provides more
information on the latest
results, including a snapshot
of the year-to-date results.
LAST TRADING EVENT
(19 JUNE 2018)
YEAR-TO-DATE

(FROM 1 AUGUST 2017)
Quantity Sold on GDT
(Winning MT)
20,455559,782
Change in Quantity Sold on GDT
over same period last year
2.1%2.3%
Weighted Average Product Price
(USD/MT)
3,5913,372
Change in Weighted Average
Product Price over same period
last year
1.3%4.9%
Change in Weighted Average
Product Price from previous event
0.7%–
Fonterra GDT Results
This chart shows Fonterra
GDT prices and volumes over
the past 12 months.

11
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
Global Dairy Trade, 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.

GLOSSARY