Global Dairy Update May 2019

• Fonterra and The Coca‑Cola Company (Coca‑Cola) have
entered into a strategic alliance that aims to capture
opportunities in the growing dairy beverage category in
southeast Asia.
• FY19 nine‑month business update.
1
GLOBAL DAIRY
UPDATE
MAY 2019
• Significant monthly production declines
in New Zealand and Australia. Monthly
production eased in the US and holding at
current levels in EU.
• Exports from New Zealand and the
EU continue to grow. Australia and US
exports decline.
• Imports into Asia and China show strong
growth. Latin America and Middle East &
Africa down.
• Fonterra’s New Zealand milk collection in April
was 109 million kgMS, 9% down on last year.
• Fonterra changes tanker schedule for #1 fan – in the Te Rapa
district of Hamilton, our tanker drivers know that every
evening their biggest fan will be waiting for them on a dairy
farm on Reid Road.
KEY DATES
1 June 2019
Measurement Date for Share Standard 2019/20 Season
September 2019
FY19 Annual Results Announcement.
For further details view
our website –

To view a chart that
illustrates year‑on‑year
changes in production –
%
%
%%
%
%
%%
Change for April 2019
compared to April 2018
Change for April 2019
compared to APril 2018
Change for March 2019
compared to March 2018
Change for March 2019
compared to March 2018
Change for the 12 months
to April 2019
Change for the 12 months
to April 2019
Change for the 12 months
to March 2019
Change for the 12 months
to March 2019
01010
501
1
2
2
OUR MARKETS
GLOBAL PRODUCTION
SIGNIFICANT MONTHLY
PRODUCTION DECLINES
IN NEW ZEALAND AND
AUSTRALIA. MONTHLY
PRODUCTION EASED IN
THE US AND HOLDING AT
CURRENT LEVELS IN EU
New Zealand milk
production¹ was down 10%
in April compared to the
same period last year.
Dry conditions continued
across most of the North
Island and parts of the South
Island. Soil moisture was
below normal for most of the
North Island and a large part
of the South Island.
New Zealand milk
production for the 12 months
to April was 2% higher than
last year.
Fonterra collections are
reported for April, see page 5
for details.
Australia milk production
decreased 10% in March
compared to the same
period last year. This is the
lowest March production in
the last 20 years.
Continued drought
conditions and high input
costs continue to put
pressure on Australian
milk production because
of reduced supplemental
feeding, increased cow cull
rates and farm exits.
Production for the 12 months
to March was down 5% on
the previous 12 months.
Fonterra collections in
Australia are reported for
April, see page 5 for details.
EU milk production
increased 1% in March
compared to the same
period last year.
Strong growth continued in
the UK but it exports very
little product outside of the
EU. Ireland growth continued
with March up 11% compared
to the same period last year.
Key exporting countries
where production declined
were Austria, France and The
Netherlands, at 4%, 1% and
2%, respectively.
Production for the 12 months
to March was up marginally
compared to the same
period last year.
US milk production
increased 0.2% in April,
compared to the same
period last year.
Milk per cow continues to
increase but the continued
drop in cow numbers
continues to limit growth.
Low profitability is leading to
an increase in culling which
is expected to continue to
impact growth over the next
few months.
Milk production for the 12
months to April was just
under 1% higher compared
to the same period last year.
NEW ZEALANDAUSTRALIAEUROPEAN UNIONUSA
1 New Zealand production for April 2019 is an estimate based on Fonterra’s actual milk collections for April 2019 and estimates for other New Zealand processors.

To view a chart that
illustrates year‑on‑year
changes in exports –
3
OUR MARKETS
GLOBAL EXPORTS
EXPORTS FROM
NEW  ZEALAND AND THE
EU CONTINUE TO GROW.
AUSTRALIA AND US MONTHLY
EXPORTS DECLINE
Total New Zealand dairy
exports increased by 27%,
or 75,000 MT, in March
compared to the same
period last year. This was
primarily driven by WMP,
fluid milk products, and
cheese, up 63,000 MT. Other
than a slight decline in butter
and casein, all other products
were up for the month.
Exports for the 12 months
to March were up 5%, or
176,000 MT, on the previous
comparable period. This was
primarily driven by WMP,
fluid milk products, and AMF,
up a combined 187,000 MT
and largely offset by SMP.
EU dairy exports increased
by 5%, or 22,800 MT, in
February compared to the
same period last year. This
was primarily driven by SMP,
and fluid milk products up a
combined 30,600 MT. This
was offset by declines in
whey powder and WMP.
Exports for the 12 months
to February were up 1%, or
60,100 MT, on the previous
comparable period. SMP,
lactose and infant formula
were up a combined
150,400 MT. This was
largely offset by a decline
in WMP, fluid milk products
and butter.
US dairy exports declined
10%, or 22,800 MT, in March
compared to the same
period last year. This was
primarily driven by base
commodities of SMP, whey
powder, lactose, WMP and
WPC, down a combined
25,200 MT. This was partially
offset by increases in cheese
of 3,700  MT.
Exports for the 12 months to
March 2019 were up 3%, or
68,300 MT, on the previous
comparable period.
Most products remain ahead
of the previous comparable
period but whey powder
and WPC are down. The US/
China trade dispute and
African Swine flu impacting
the China hog industry has
led to a downturn in whey
imports by China.
Australia dairy exports
decreased by 3%, or
2,000 MT, in March
compared to the same
period last year. This decline
was due to WMP, SMP, and
cheese, down a combined
8,200 MT. This was offset by
an increase in infant formula
and fluid milk products, up
6,000  MT.
Exports for the 12 months
to March were up 5%, or
36,600 MT, on the previous
comparable period.
Infant formula, fluid milk
products, and whey powder
make up most of the current
growth in Australian exports.
NEW ZEALANDAUSTRALIAEUROPEAN UNIONUSA
%
%
%%
%
%
%%
Change for March 2019
compared to March 2018
Change for March 2019
compared to March 2018
Change for March 2019
compared to March 2018
Change for February 2019
compared to February 2018
Change for the 12 months
to March 2019
Change for the 12 months
to March 2019
Change for the 12 months
to March 2019
Change for the 12 months
to February 2019
10327
513
5
5

To view a chart that
illustrates year‑on‑year
changes in imports –
4
OUR MARKETS
GLOBAL IMPORTS
IMPORTS INTO ASIA AND
CHINA SHOW STRONG
GROWTH. LATIN AMERICA
AND MIDDLE EAST &
AFRICA  DOWN
Latin America dairy
import volumes¹ decreased
1%, or 1,600 MT, in February
compared to the same
period last year. Declines
in SMP, infant formula and
whey powder of a combined
9,500 MT, were largely offset
by fluid milk products, WMP,
cheese and WPC.
Imports for the 12 months to
February 2019 were up 5%,
or 90,900 MT, compared
to the same period the
previous year. SMP, fluid
milk products, WMP, infant
formula and MPC were up a
combined 94,200 MT offset
by declines in whey powder,
other powders.
Asia (excluding China)
dairy import volumes¹
increased 10%, or 37,500  MT,
in February compared to
the same period last year.
SMP, fluid milk products,
cheese and WMP were up
but offset by declines in
whey powder, ice cream and
other powders.
Imports for the 12 months
to February were up 7%, or
309,400 MT, compared to
the same period the previous
year. This growth continues
to be driven by fluid milk
products, WMP, SMP, lactose,
cultured products, cheese,
and infant formula up a
combined 295,200  MT.
The import market remains
in a solid growth phase.
Middle East and Africa
dairy import volumes¹
decreased 11%, or 39,300 MT
in February 2019 compared
to the same period last year.
Small growth in MPC was
offset by declines in most
other product, principally
cheese, SMP, infant formula
and butter down a combined
30,500  MT.
Imports for the 12 months
to February 2019 were
down 7%, or 306,700  MT,
compared to the same
period the previous year. The
reduction has been driven by
cheese, fluid milk products,
SMP, butter and other
powders down a combined
307,200  MT.
China dairy import
volumes increased 11%,
or 22,700 MT, in March
compared to the same
period last year. This was
driven by increases in WMP
and fluid milk products up
a combined 35,300 MT but
partially offset by whey
powder which was down
13,400  MT.
Imports for the 12 months
to March were up 8%, or
219,300 MT, compared to the
same period last year.
Strong demand out of China
continued with imports
across all key categories,
notably WMP, SMP, infant
formula and lactose, which
were up a combined
202,200  MT.
LATIN AMERICAASIAMIDDLE EAST & AFRICACHINA
1 Estimates are included for those countries that have not reported data.
%
%
%%%
%%%
Change for February 2019
compared to February 2018
Change for March 2019
compared to March 2018
Change for February 2019
compared to February 2018
Change for February 2019
compared to February 2018
Change for the 12 months
to February 2019
Change for the 12 months
to March 2019
Change for the 12 months
to February 2019
Change for the 12 months
to February 2019
11101
778
11
5

To view a table that shows our
detailed milk collection in New
Zealand and Australia compared
to the previous season –
%
%
%%%
%%%
Season to date
1 July to 30 April
Season to date
1 June to 30 April
Season to date
1 June to 30 April
Season to date
1 June to 30 April
Decrease for April 2019
compared to April 2018
Decrease for April 2019
compared to April 2018
Decrease for April 2019
compared to April 2018
Decrease for April 2019
compared to April 2018
315139
19311
VOLUME M LITRESDAY
JUNJULAUGSEPOCTNOVDECJANFEBMARAPRMAY










5
OUR MARKETS
FONTERRA MILK COLLECTION 2018/19 SEASON
NEW ZEALANDNORTH ISLANDSOUTH ISLANDAUSTRALIA
NEW ZEALAND MILK COLLECTION
Fonterra’s share of monthly
collection continues to reduce
due to adverse on‑farm and
weather conditions, increasing
cull cow rates, retirements
in key regions, cost of inputs
and milk collection losses in a
highly competitive market.
Dairy Australia continue to
forecast a milk production
decline of between 7% and 9%
for the season.
Northern regions continued to
be affected by the dry weather,
and although rainfall helped
improve pasture conditions to
some extent, farms began to
dry off for the season.
Collections in April were
57 million kgMS, 13% behind
the same month last season,
with season to date collection
reaching 862 million kgMS, 1%
ahead of last season.
Central South Island continued
its strong production profile
in April, however drier than
normal conditions had some
impact on volumes in the
lower South Island.
Collections in April were
52 million kgMS, 5% lower than
the same month last season,
with season to date collection
reaching 592 million kgMS, up
3% on last season.
Drier than average conditions
continued into April for some
regions, affecting volumes.
Collection for the season to
date reached 1,454 million
kgMS, up 1%. Strong spring
volumes are now being offset
by decreases for February,
March and April compared to
the same months last season.
Forecast Farmgate Milk
Price for the 2019/20 season
Forecast milk collection
for the 2019/20 season
per
KGMS
6.25-
7. 2 5
1, 5 2 0M
KGMS
The 2019/20 Forecast Farmgate
Milk Price range is $6.25‑$7.25
per kgMS. Collections are
estimated at 1,520 million
kgMS in the 2019/20 season.
Forecast Farmgate Milk Price
and Fonterra Milk Collection
Across New Zealand
NZD
The inclusion of off‑GDT
sales contributed 10 cents
per kgMS to the Milk
Price for the season to
30 April 2019.

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



,
,
,
.

.
.
.
.
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
weakened further in April as
inflation data increased the
likelihood of a reduction in
interest rates by the Reserve
Bank of New Zealand.
Fonterra GDT results at
last trading event
21 May 2019:
The next trading event will be held on 4 June 2019. Visit www.globaldairytrade.info for more information.
Change in Fonterra’s
weighted average product
price from previous event
2.3
Fonterra’s weighted
average product price

(USD/MT)
3,485
USD
Fonterra product quantity
sold on GDT
000’ MT
14.8
NORTH ASIA (INCLUDING CHINA)
SOUTH EAST ASIA
MIDDLE EAST AND AFRICA
LATIN AMERICA
OTHER
USD 5,297/MT
3.4
BUTTER
USD 6,916/MT
4.6
RENNET CASEIN
USD 6,140/MT
1.2
AMF
USD 2,550/MT
0.4
SMP
USD 3,180/MT
2.1
WMP
USD 4,851/MT
15.0
CHEDDAR
14,785
MT
LATEST AUCTION
585,850
MT
FINANCIAL
YEAR‑TO‑DATE

Fonterra and The
Coca‑Cola Company
launch dairy beverages
alliance across
southeast Asia
Fonterra and The Coca‑Cola
Company (Coca‑Cola) have
entered into a strategic
alliance that aims to capture
opportunities in the growing
dairy beverage category in
southeast Asia.
The partnership combines
Fonterra’s generations of
expertise in dairy nutrition
with Coca‑Cola’s in‑market
sales and distribution
capabilities and kicks off with
the launch of a new range
of dairy‑based products
in Vietnam.
The new products,
launched under Coca‑Cola’s
Nutriboost brand, Fonterra’s
trusted and nutritious dairy,
providing important nutrition
to kids, teens and adults
in a product range that
can be enjoyed at different
occasions throughout the
day. Nutriboost is already
a leading beverage brand
in Vietnam that offers
customers a delicious
combination of nutritious
milk and fruit juice in a
ready‑to‑drink product.
Judith Swales, Chief
Operating Officer of
Fonterra’s Global Consumer
and Foodservice business,
says the alliance aims to
grow demand and increase
share in the dairy beverage
category across the region.
“Both Fonterra and
Coca‑Cola are committed to
disrupting and accelerating
the growth of the dairy
ready‑to‑drink category in
southeast Asia, by exciting
consumers with innovative
new products that offer
tailored nutritional benefits,”
says Judith.
“Dairy has become one of
the fastest growing beverage
categories in southeast Asia.
Demand is being driven by
consumers’ increased focus
on health and wellness and
the category is expected to
grow on average at more
than five per cent each year
between 2016 and 2020.
Iain McLaughlin, President
of The Coca‑Cola Company’s
ASEAN business unit,
says the alliance with
Fonterra is in‑line with
Coca‑Cola’s well‑established
strategy to become a total
beverage company.
“We believe the value‑added
dairy beverage category
offers a significant
opportunity for growth in
the region and the expanded
Nutriboost range is the first
step in our combined efforts
with Fonterra to deliver
winning new products for
consumers,” said Iain.
Following the launch of
the Nutriboost kids and
adults ranges in Vietnam,
Coca‑Cola and Fonterra
will explore opportunities
to launch a range under
Fonterra’s Anchor brand as
well as new products in other
markets across southeast
Asia including Indonesia,
Thailand and Philippines.
7
OUR PERFORMANCE

FONTERRA
CHANGES
TANKER
SCHEDULE FOR
#1 FAN
In the Te Rapa district of
Hamilton, our tanker drivers
know that every evening
their biggest fan will be
waiting for them on a dairy
farm on Reid Road.
Fonterra milk tankers are
Andrew Oliver's favourite
thing in the world and local
tanker drivers have long
known that Andrew won't go
to bed until they've been on
the  farm.
But when it became
unmanageable for his
65‑year‑old parents, we knew
we had to step in and help.
Our Te Rapa tanker depot
changed their milk tanker
schedule in the entire district
so that Andrew would go to
bed on time.
Andrew Oliver is one
of about eight people
in the world living with
Fryns‑Aftimos syndrome
– he's the oldest known
to have it and the only
one in New Zealand with
the condition.
The extremely rare syndrome
is the result of a mutation
in one of his chromosomes
which means that, at 35 years
old, he has the mental age
of a 6‑year‑old and suffers
many other symptoms.
For the past 15 years he's had
a special relationship with
our tanker drivers.
Ken Oliver, his father, said
Andy discovered the tanker
when the farm went onto the
night shift for milk pick up.
"He learned what it
was, came out to see it
occasionally and once in
a while would talk to a
driver. But then with Andy,
the normal thing is with
something like this – it
would become a habit. And
so he had to be out to see
the tanker. That became part
of his nightly routine."
Andy's nightly routine
consists of a list of things he
has to tick off.
Every night he draws a
picture to give to the tanker
driver, he has to watch the
weather report on the 6pm
news, then he has dinner and
a bath.
But the last thing to tick off –
is the tanker.
Ken said that if the tanker
hadn't come, Andy wouldn't
go to bed. For him, waking
up at 5am to tend the farm, it
became a struggle.
"We simply didn't know
when the tanker was coming.
You might get 2am in the
morning or something
like that and he wouldn't
go to bed until the tanker
had come."
For over a decade, Andrew's
parents managed his tanker
visits until one day Ken says
he came to a breaking point.
"Deirdre had just been
diagnosed with having
had a minor stroke, I was
absolutely out on my feet
trying to keep the farm
going. Surviving on three or
four hours sleep and I'd just
run out. I'd hit the wall and
so I phoned the call centre
and actually started crying
on the phone, I was just
so shot.
"I just said look, my life has
just become impossible and
just explained what was
going on. I need sleep and I
can't get sleep until this boy's
in bed."
The person at the call centre
decided to help.
After hearing about Ken's
call, our depot decided to
change their entire milk
tanker schedule in the
Te Rapa district to make
sure Andy could get to bed
on time.
Ken is now guaranteed a
pick up anywhere between
6:30pm and 8pm.
Fonterra tanker driver
Kevin Healey said Andy
draws them a picture each
night and they put them up
on the wall at work.
"It's not something we
encounter every day, we
can tell you that... It's a
special relationship."
On top of Andy's rare
syndrome, he also has five
types of epilepsy.
So the Te Rapa district tanker
drivers have been briefed on
health and safety procedures
and what to do if Andy had a
seizure during a tanker visit.
"A lot of us guys that have
been here before, we know
what to expect and we have
an in cab screen which has
a warning along the bottom
to make sure drivers are
reminded to be careful
going down the track just in
case Andy's floating about,"
Kevin said.
"That's programmed into
the screen and would come
up every time that vehicle
comes into this farm, it
would come up before
we go."
These drivers mean a lot to
Andy, but Kevin says Andy
means a lot to them too.
The tanker drivers have
supplied Andy with a
uniform – a high‑vis Fonterra
shirt and a hat and have
also given him a model
tanker which is a part of his
treasured truck collection.
Ken, who has his PhD in
chemistry and has been a
dairy farmer for 40 years,
said the change in pick up
time has meant a lot to
the family.
"A big outfit like Fonterra
doesn't have to do that.
They simply could've ignored
the request but no, they
came through. And we're
very grateful."
Kevin said the 15‑minute
visit to the farm to drain its
milk vats every evening is a
special treat for the tanker
drivers on that shift.
"We like to come out here.
You realise that you're lucky,
how lucky you are that we're
able to do this. If we can
make Andy's day well, hey
that's the icing on the cake."
Article produced by
RNZ’s Indira Stewart and
Tim Collins, videographer.
ANDY ON HIS WAY TO MEET THE FONTERRA TANKER. PHOTO: RNZ
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 New Zealand, EU and Australia to March; US to April.
NOTE: Data for EU to February; New Zealand, Australia and US to March.
NOTE: Data for Latin America, Asia, Middle East & Africa to February; China to March.
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)
APRIL
2019
APRIL

2018
MONTHLY
CHANGE
SEASON-
TO-DATE
2018/19
SEASON-
TO-DATE
2017/18
SEASON-
TO-DATE
CHANGE
Total Fonterra
New Zealand
109.1120.4(9.4%)1,454.31,434.21.4%
North Island56.765.3(13.3%)862.2857.20.6%
South Island52.455.1(4.8%)592.1577.02.6%
Fonterra Australia7.911. 4(30.7%)107.0131.8(18.8%)
Fonterra GDT results
This table provides more
information on the latest
results, including a snapshot
of the year‑to‑date results.
LAST TRADING EVENT
(21 M AY 2019)
YEAR-TO-DATE

(FROM 1 AUGUST 2018)
Quantity Sold on GDT
(Winning MT)
14,785585,850
Change in Quantity Sold on GDT
over same period last year
(15.5%)12.9%
Weighted Average Product Price
(USD/MT)
3,4853,069
Change in Weighted Average
Product Price over same period
last year
(6.1%)(8.5%)
Change in Weighted Average
Product Price from previous event
(2.3%)–
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.
MPC
Milk Protein Concentrate.
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.

GLOSSARY
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.
WPC
Whey Protein Concentrate