Global Dairy Update March 2019

• Forecast Farmgate Milk Price
range $6.30‑$6.60 per kgMS.
• Returned to profitability in
the first half of FY19 with a
reported Net Profit After Tax
(NPAT) of $80 million but
normalised EBIT of $323 million, down 29%.
• Full year earnings guidance revised to 15‑25 cents per share
in February. No interim dividend.
• Significant progress made on three‑point plan.
• Full strategic review underway.
Visit our website for
more details –
1
GLOBAL DAIRY
UPDATE
MARCH 2019
• Production growth in New Zealand and
the US is easing. EU growth and Australia
production is declining.
• New Zealand exports increased in January.
Exports from Australia and the EU continue to
grow. US exports begin to ease.
• Imports into Asia and China show strong
growth. Latin America increased but the
Middle East and Africa region is declining.
• Fonterra has updated its forecast milk
collection for the full season to 1,510 million
kgMS, slightly above last season’s collections
of 1,505 million kgMS, following a prolonged
period of dry weather particularly in the
North Island and upper South Island.
• Fonterra’s Waikato and Bay of Plenty tankers are now all up
and running on biodiesel thanks to Z Energy.
KEY DATES
May 2019
Q3 Business Update
1 June 2019
Measurement Date for Share
Standard 2019/20 Season
September 2019
FY19 Annual Results
Announcement
1 December 2019
Compliance Date for Share
Standard 2019/20 Season

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To view a chart that
illustrates year‑on‑year
changes in production –
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2
OUR MARKETS
GLOBAL PRODUCTION
PRODUCTION GROWTH IN
NEW  ZEALAND AND THE
US IS EASING. EU  GROWTH
AND AUSTRALIA PRODUCTION
IS  DECLINING
Total New Zealand milk
production in February was
broadly flat compared to the
same period last year.
Dry conditions continued
for most of February. Soil
moisture has dropped to
below normal, impacting key
North Island dairy regions.
Drought conditions prevail in
the upper South Island but
dairy regions in the lower
part of the South Island have
not been greatly impacted.
New Zealand milk
production for the 12‑months
to February 2019 was 4%
higher than last year.
Fonterra collections are
reported for February, see
page 5 for details.
Australian milk
production decreased 11%
in January 2019 compared to
the same period last year.
Production for the 12 months
to January is down 3% on the
previous 12 months.
High input costs, increased
cow cull rates, and farm
exits continue to severely
impact milk production.
Dairy Australia has forecast
a milk production decline
of between 7% and 9% for
the season.
Fonterra collections in
Australia are reported
for February, see page 5
for details.
EU milk production
decreased 1% in January
compared to the same
period last year. This is
the fifth consecutive
monthly decline on a
year‑on‑year basis.
Growth continued to
slow through the second
half of 2018. Austria, The
Netherlands, France and
Germany saw negative
monthly growth. This was
offset by growth in Poland,
UK, Denmark and Belgium.
Ireland was broadly flat
after an extended period of
strong growth.
Production for the 12 months
to January was up less than
1% compared to the same
period last year.
US milk production
was up less than 1% in
February compared to the
same period last year. Cow
numbers have continued
to decline with the small
monthly growth on a
year‑on‑year basis driven by
increased yield per cow.
Margins continue to be
squeezed and in many cases
were negative in the last
quarter of 2018. Growth is
likely to remain constrained
until some improvement in
margin is achieved.
Milk production for the
12 months to February was
just under 1% compared to
the same period last year.
NEW ZEALANDAUSTRALIAEUROPEAN UNIONUSA
Production change
for the 12 months to
January 2019
Production change
for the 12 months to
February 2018
Production change
for the 12 months to
January 2019
Production change

for the 12 months to
February 2019
4310

%
To view a chart that
illustrates year‑on‑year
changes in exports –
%%
3
OUR MARKETS
GLOBAL EXPORTS
NEW  ZEALAND EXPORTS
INCREASED IN  JANUARY.
EXPORTS FROM AUSTRALIA
AND THE EU CONTINUE TO
GROW. US EXPORTS BEGIN
TO  EASE
Total New Zealand dairy
exports increased by 16%,
or 51, 000 MT, in January
compared to the same
period last year. This was
primarily driven by WMP,
up 27,000 MT. AMF, fluid
products, and butter were up
a combined 22,000  MT.
Exports for the 12 months
to January were up 2%, or
51, 000 MT, on the previous
comparable period. This
was primarily driven by
WMP, up 26,000 MT. AMF,
fluid products, butter and
SMP were up a combined
26,000  MT.
EU dairy exports increased
by 4%, or 15,000 MT, in
December compared to
the same period last year.
This was primarily driven by
SMP, lactose, whey powder,
and WPC up a combined
31,000 MT. This was offset
by declines in WMP, cultured
products, fluid products
and cheese of a combined
15, 000  MT.
Exports for the 12 months
to December were up
1%, or 48,000 MT, on the
previous comparable period.
Infant formula alone was up
46,000 MT to 586,000  MT.
There was continued growth
in a broad range of products,
led by infant formula, SMP,
and lactose offset by declines
in fluid products and WMP.
US dairy exports declined
by 18%, or 36,000 MT, in
December compared to
the same period last year.
This was primarily driven by
whey powder, SMP, lactose
and WPC, down a combined
37,000  MT.
Although SMP was down
in December compared to
the same period last year, it
was up 108,000 MT, for the
12 months to December.
Exports for the 12 months to
December were up 9%, or
208,000 MT, on the previous
comparable period.
Australian dairy exports
increased 32%, or 16,000  MT,
in January compared to the
same period last year. This
growth was due to SMP,
infant formula, fluid products
and whey powder up a
combined 18,000 MT. This
was offset by a decline in
WMP of 3,000  MT.
Exports for the 12 months
to January were up 8%, or
59,000 MT, on the previous
comparable period.
Infant formula, SMP, fluid
products and whey powder
make up most of the growth
in Australian exports, up a
combined 55,000  MT.
NEW ZEALANDAUSTRALIAEUROPEAN UNIONUSA
981
2
Export change for the 12
months to December 2018
Export change for the 12
months to January 2019
Export change for the 12
months to January 2019
Export change for the 12
months to December 2018
%

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%
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illustrates year‑on‑year
changes in imports –
4
OUR MARKETS
GLOBAL IMPORTS
IMPORTS INTO ASIA
AND  CHINA SHOW
STRONG  GROWTH.
LATIN  AMERICA INCREASED
BUT THE MIDDLE EAST AND
AFRICA REGION IS  DECLINING
Latin American dairy
import volumes¹ increased
2%, or 3,000 MT, in
December compared to
the same period last year.
The increase was primarily
SMP and infant formula, up
a combined 7,000 MT. This
was offset by a decline in
WMP and whey powder.
Imports for the 12 months
to December were up 3%,
or 65,000 MT, compared to
the same period the previous
year. SMP, lactose, fluid
products and MPC were up a
combined 73,000 MT offset
by declines in AMF and
WMP of 18,000  MT.
Asia (excluding China)
dairy import volumes¹
increased 12%, or 44,000 MT
in December compared
to the same period last
year. SMP, WMP and fluid
products were up but offset
by declines in ice cream
and cheese.
Imports for the 12 months
to December were up 6%,
or 285,000 MT, compared
to the same period the
previous year. This growth
continues to be driven
by fluid products, WMP,
SMP, lactose and whey
powder of 277,000 MT. The
market remains in a solid
growth phase.
Middle East and Africa
dairy import volumes¹
decreased 10% or 35,000 MT
in December compared to
the same period last year.
Small growth in infant
formula and AMF was offset
by declines in most other
products, principally cheese,
WMP and butter, down a
combined 31,000  MT.
Imports for the 12 months to
December were down 5%,
or 222,000 MT, compared to
the same period the previous
year. The reduction was
driven by fluid products and
cheese, down a combined
212,000 MT. This was offset
by a small increase in SMP.
China dairy import
volumes increased 17%,
or 64,000 MT in January
compared to the same
period last year. This was
driven by increases across
a broad range of products,
particularly WMP, SMP,
and infant formula up a
combined 64,000 MT. WMP
imports reached a record
peak of 182,000  MT.
Imports for the 12 months
to January were up 6%, or
162,000 MT, compared to
the same period last year.
Strong demand continued
with imports across key
categories, particularly WMP,
SMP and infant formula
which were up a combined
128,000  MT.
LATIN AMERICAASIAMIDDLE EAST & AFRICACHINA
Import change for the 12
months to January 2019
Import change for the 12
months to December 2018
Import change for the 12
months to December 2018
Import change for the 12
months to December 2018
66
5
3
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 2018/19 SEASON
NEW ZEALANDNORTH ISLANDSOUTH ISLANDAUSTRALIA
Increase for the season from
1 June to 28 February
Increase for the season from
1 June to 28 February
Increase for the season from
1 June to 28 February
4
Decrease for the season
from 1 July to 28 February
44
17
NEW ZEALAND MILK COLLECTION
Fonterra’s milk collection
across Australia for the eight
months to 28 February reached
91 million kgMS, down 17% on
the same period last season.
Fonterra collections in February
was 8 million kgMS, down 28%
on February last season.
Fonterra’s share of monthly
collection continues to reduce
due to adverse on‑farm
conditions, cull cow rates,
retirements in key regions,
and milk collection losses in a
highly competitive market.
North Island milk collection
in February was 73 million
kgMS, down 5% on February
last season.
Much of the North Island has
been affected by on‑going hot
and dry conditions, with
adverse impacts on pasture
condition and milk flows.
Supplementary feed is being
used to maintain good animal
condition and provide a degree
of support for milk volumes.
Milk collection for the 2018/19
season to date reached
738 million kgMS, up 4%.
South Island milk collection
in February was 60 million
kgMS, 3% higher than February
last season.
The Upper South Island
area has been classified as
experiencing a medium‑scale
drought, with other regions
also seeing pasture growth
rates slow. Increased use
of supplementary feed has
contributed to overall milk
flow from the South Island
remaining strong.
Milk collection for the 2018/19
season to date reached
478 million kgMS, up 4%.
Fonterra’s milk collection
across New Zealand for the
current season from 1 June to
28 February was 1,216 million
kgMS, up 4% on the same
period last season.
Low rainfall and above average
temperatures continued
through February, slowing milk
production across most regions
but particularly in the North
Island and upper South Island.
Collections in February were
133m kgMS, 2% down on the
same month last season, the
first month this season where
total New Zealand production
was below the equivalent
month last season.
%
1,510M
KGMS
Fonterra has reduced its full
season forecast milk collection
for the 2018/19 season to
1,510 million kgMS, down from
1,530 million kgMS announced
in February.
Whilst collections are
4% ahead on a season to
date basis, the influence
of prolonged dry weather,
particularly in the North Island,
has had an adverse impact
on on‑farm conditions and
therefore production in the
second half of the season.
On farm conditions will
continue to be an important
factor on the milk supply for
the remainder of the season.
We will continue to
provide updates as the
season progresses.
Forecast Fonterra Milk
Collection Across New Zealand

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To view more information,
including a snapshot of the
rolling year‑to‑date results –
%
6
GDT PRICE INDEXNZDUSD SPOT RATE
MAR JAN
JUN
AUG
OCT
JAN MAR JUN AUG OCT MAR



,
, 
,
.
.
.
.
.
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
declined marginally during
February as the Reserve Bank
signalled their intent to keep
New Zealand interest rates
on hold for the foreseeable
future against a backdrop of
global growth concerns.
Fonterra GDT results at
last trading event
19 March 2019:
The next trading event will be held on 2 April 2019. Visit www.globaldairytrade.info for more information.
Change in Fonterra’s
weighted average product
price from previous event
0.4
Fonterra’s weighted
average product price

(USD/MT)
3,386
USD
Fonterra product quantity
sold on GDT
000’ MT
20.7
NORTH ASIA (INCLUDING CHINA)
SOUTH EAST ASIA
MIDDLE EAST AND AFRICA
LATIN AMERICA
OTHER
USD 6,190/MT
9.6
RENNET CASEIN
USD 5,089/MT
9.3
BUTTER
USD 3,317/MT
4.1
WMP
USD 4,036/MT
3.8
CHEDDAR
USD 2,438/MT
2.3
SMP
USD 5,662/MT
3.0
AMF
20,740
MT
LATEST AUCTION
523,873
MT
FINANCIAL
YEAR‑TO‑DATE

Skim UHT milk reaches
#1 spot in China
Anchor™ Skim Milk UHT has
become the top skim milk
brand in Greater China.
This follows our skim milk
sales doubling in the first
half of 2018/19, up 131%
compared to last year.
Greater China President
Christina Zhu says achieving
the number one spot is a
fantastic result. “Skim Milk
UHT joins our Anchor UHT
which is number one both
online and offline. In 2018,
Anchor milk powder reached
the top spot and our Anchor
butter reached second place
in market share.”
As Chinese consumers
become more diet conscious,
they’re looking for lower‑fat
options. Not only low in
fat, Anchor™ skimmed
milk is rich in calcium and
protein, making it popular
with fitness‑focused
consumers and gym‑goers.
The brands team in China
launched a “calorie killer”
campaign to generate high
consumer interest on a tight
marketing budget.
“Health has always been
a big focus for Chinese
but they’re now looking
to balance their busy lives
with a more well‑rounded
lifestyle. Younger consumers,
in particular, are looking
for brands and products
that help them manage a
healthier lifestyle while on
the go.”
Globally, the wellness
market is valued at
around US$3.7 trillion,
and the number of low‑fat
products is growing as the
competition for a bigger
share of this market grows.
Fonterra to explore
opportunities in
complementary
nutrition
Fonterra has taken a stake
in Motif Ingredients, a
US‑based food ingredients
company that develops
and commercialises
bio‑engineered animal and
food ingredients.
Fonterra joins Ginkgo
Bioworks, Breakthrough
Energy Ventures,
Louis Dreyfus Companies
and Viking Global Investors.
Judith Swales, head of
Fonterra’s Global Consumer
and Foodservice business,
says the move is part of the
Co‑operative’s commitment
to its farmer‑owners to stay
at the forefront of innovation
to understand and meet
the changing preferences
of consumers. While the
terms will not be disclosed,
Fonterra’s investment
represents a minority stake
in the business.
“Farmers expect their co‑op
to get the most value from
every drop of their milk
and also keep an eye on
tomorrow to future‑proof
their co‑op for generations
to come.
“Dairy nutrition will always
be at our core, but we also
want to explore how we can
capture more value from
new types of nutrition.
“The complementary
nutrition category – where
plant, insect, algae and
fermentation‑produced
nutrition co‑exist alongside
animal proteins, including
cows’ milk – is fast evolving.
It’s not a case of either/or,
but both,” says Judith.
“If we fast forward 30 years,
there’ll be two billion more
mouths to feed and there
simply won’t be enough
food to go around just
using today’s methods. A
combination of traditional
and complementary
nutrition sources will be
required to meet the world’s
increasing need for food,
especially protein.
“Consumers around the
world will continue to want
natural, grass fed dairy
as a premium source of
nutrition. At the same time,
we recognise that no two
consumers are the same.
As diets and preferences
continue to evolve, we want
to be there, providing people
with choices.
“Our stake in Motif will
help us be part of this
emerging next‑generation
fermentation‑produced
nutrition sector,” says Judith.
Motif has been established
by Ginkgo Bioworks, one of
the world’s leading organism
companies. Using a process
similar to how insulin,
vitamins and beer are made,
Motif’s team of world leading
biotech experts will harness
state‑of‑the‑art genetic
science and fermentation
technology to recreate and
sell animal proteins and food
ingredients, including those
similar to dairy ingredients.
Jonathan McIntyre, Motif
Ingredients’ CEO, says
“Through biotechnology
and fermentation, Motif
will propel the next food
revolution with affordable,
sustainable and accessible
ingredients that meet
the standards of chefs,
food developers, and
visionary brands.”
The inclusion of off‑GDT
sales has contributed 8 cents
per kgMS for the season to
date to 31 January 2019
7
OUR PERFORMANCE

FUELLED BY
BIODIESEL
Fonterra’s Waikato and
Bay of Plenty tankers are
now all up and running
on biodiesel thanks to
Z Energy.
The Co‑op has been
working closely with
Z Energy since 2014 to
help introduce biodiesel
to New Zealand as part
of its commitment to
reduce emissions across
its operations.
Fast forward to 2019,
Fonterra now has its
156 tankers in the Waikato
and Bay of Plenty area
producing 4% less
emissions per year.
Fonterra General Manager
National Transport and
Logistics Barry McColl
says, it’s a step in the right
direction for reaching our
climate targets.
“Over the course of a year,
our use of 160,000 litres
of biodiesel, mainly in
the Waikato and Central
North Island, will prevent
around 425 tonnes
of carbon dioxide
being emitted.
“By working with Z Energy,
we’re taking another
step toward reducing
our carbon footprint.
We’re also supporting
the commercialisation
of biodiesel which will
eventually help other
businesses, the public and
farmers use it to reduce
their emissions.
“We’re one of the most
emissions efficient
producers of dairy in the
world. We’re proud of that,
but we’re also up for the
challenge of doing better.”
No modifications are
needed to use the new
fuel, which is a blend of
up to 5% biodiesel and
ordinary diesel.
Using biofuel is just one
of the ways we’re working
toward our target to
reduce emissions by 30%
across all our operations
by 2030, with a goal to
achieve net zero by 2050.
OUR CO-OP
8

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 EU and Australia to January; New Zealand and US to February.
NOTE: Data for EU and US to December; New Zealand and Australia to January.
NOTE: Data for China to January; Asia, Middle East and Africa, Latin America to December.
SOURCE: Government milk production statistics/GTIS trade data/Fonterra analysis.

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

,

,

,

,
,

,

,

,

,
,
,
,
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)
FEBRUARY
2019
FEBRUARY

2018
MONTHLY
CHANGE
SEASON-
TO-DATE
2018/19
SEASON-
TO-DATE
2017/18
SEASON-
TO-DATE
CHANGE
Total Fonterra
New Zealand
133.1135.3(1.7%)1,215.71,171.23.8%
North Island72.876.7(5.1%)737.6712.83.5%
South Island60.358.72.8%478.1458.44.3%
Fonterra Australia7.810.8(27.8%)90.9109.1(16.7%)
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 MARCH 2019)
YEAR-TO-DATE

(FROM 1 AUGUST 2018)
Quantity Sold on GDT
(Winning MT)
20,740523,873
Change in Quantity Sold on GDT
over same period last year
18.8%16.9%
Weighted Average Product Price
(USD/MT)
3,3863,014
Change in Weighted Average
Product Price over same period
last year
(10.1%)(8.9%)
Change in Weighted Average
Product Price from previous event
0.4%–
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 Products
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