Global Dairy Update June 2019

• Fonterra offers farmers new pricing tool with Fixed Milk Price.
• Going organic: new paediatrics powder launched in China.
1
GLOBAL DAIRY
UPDATE
JUNE 2019
• Significant monthly production decline in
Australia. New Zealand finished season up on
weak prior season. Steady growth in the EU
and growth easing in the US.
• Exports from New Zealand, Australia and the
EU continue to grow. Large decline in monthly
US exports.
• Monthly imports into China and Asia show
strong growth. Latin America and Middle East
& Africa down in March.
• Fonterra’s New Zealand milk collection for the
season ended 31 May 2019 was 1,523 million
kgMS, 1% up on weak prior season.
• Forecast milk collection for the 2019/20
season is 1,520 million kgMS.
• Celebrated brothers turn brains to dairy problems.
KEY DATES
September 2019
FY19 Annual Results
Announcement.
11 November 2019
Fonterra Shareholders' Fund
Annual Meeting
December 2019
FY20 Q1 Business Update
20 April 2020
Share Standard Compliance
2019/20 Season

To view a chart that
illustrates year-on-year
changes in production –
%
%
%%
%
%
%%
Change for May 2019
compared to May 2018
Change for May 2019
compared to May 2018
Change for April 2019
compared to April 2018
Change for April 2019
compared to April 2018
Change for the 12 months
to May 2019
Change for the 12 months
to May 2019
Change for the 12 months
to April 2019
Change for the 12 months
to April 2019
0.413.70.1
6.10.40.5
1.2
2.2
2
OUR MARKETS
GLOBAL PRODUCTION
SIGNIFICANT MONTHLY
PRODUCTION DECLINE IN
AUSTRALIA. NEW  ZEALAND
FINISHED SEASON UP ON
WEAK PRIOR SEASON. STEADY
GROWTH IN THE EU AND
GROWTH EASING IN THE  US
New Zealand milk
production was down 0.1%
in May compared to the
same period last year.
New Zealand weather
improved in May with
temperatures above average
across the country and
rainfall near or above average
in the Waikato, Taranaki and
most of the South Island.
New Zealand milk
production for the 12
months to May was 2.2%
higher than last year, which
was considered a weak
production year due to
unfavourable weather.
Fonterra collections are
reported for May, see page 5
for details.
Australia milk production
decreased 13. 7% in April
compared to the same
period last year.
Production for the 12 months
to April is down 6.1% on the
previous 12 months.
High input costs have led
to lower milk production
and low farmer confidence.
Reduced supplemental
feeding, increased cow cull
rates and farm exits continue
to impact production.
Fonterra collections in
Australia are reported for
May, see page 5 for details.
EU milk production
increased 1% in April
compared to the same
period last year.
Growth continues in Ireland,
up 15. 0% in April 2019,
supported by favourable
weather relative to the
same period last year which
was impacted by poor
spring weather.
Key exporting countries
where production
declined were Austria,
France, Germany and the
Netherlands, at 1.6%, 1.0%,
0.5% and 1.7% respectively.
EU milk production for the
12 months to April was up
0.4% compared to the same
period last year.
US milk production
decreased 0.4% in May,
compared to the same
period last year.
Poor profitability is leading
to an increase in culling
which is likely to continue to
impact growth over the next
few months.
Milk production for the 12
months to May was 0.5%
higher compared to the
same period last year.
NEW ZEALANDAUSTRALIAEUROPEAN UNIONUSA

To view a chart that
illustrates year-on-year
changes in exports –
3
OUR MARKETS
GLOBAL EXPORTS
EXPORTS FROM
NEW  ZEALAND, AUSTRALIA
AND THE EU CONTINUE TO
GROW. LARGE DECLINE IN
MONTHLY US  EXPORTS
Total New Zealand dairy
exports increased by
13.6%, or 37,100 MT, in April
compared to the same
period last year. This was
primarily driven by WMP
and fluid milk products,
up 32,400 MT. Butter
had the largest decline in
volume, down 3,100 MT for
the month.
Exports for the 12 months
to April were up 5.4%, or
176,500 MT, on the previous
comparable period. This was
primarily driven by WMP,
fluid milk products, AMF,
and infant formula, up a
combined 224,900 MT. SMP
was down 43,000  MT.
EU dairy exports increased
by 5.7%, or 26,700 MT, in
March compared to the
same period last year. This
was primarily driven by SMP,
and fluid milk products up
a combined 49,700  MT.
This was partially offset by
declines in WMP, cheese,
whey powder, and infant
formula, of a combined
22,700  MT.
Exports for the 12 months
to March were up 1.9%, or
101,300 MT, on the previous
comparable period. SMP,
lactose, WPC, MPC and
infant formula were up a
combined 196,900 MT. This
was offset by a 100,100 MT
decline in WMP, butter, AMF,
and fluid milk products.
US dairy exports declined
21.2%, or 51,400 MT, in
April 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
46,400  MT.
Exports for the 12 months to
April 2019 were down 1.9%,
or 45,100 MT on the previous
comparable period.
The US has seen a more
than 100,000 MT decline in
whey products to China in
the last 12 months. This was
partially offset by increases
in SMP to Mexico and fluid
milk products to Canada
and Taiwan.
Australia dairy exports
increased by 5.6%, or
3,500 MT, in April compared
to the same period last year.
This was primarily driven
by infant formula, fluid milk
products and cheese, up
7,400 MT. The increase was
offset by declines in WMP
and SMP, down a combined
4,700  MT.
Exports for the 12 months
to April were up 3.9%, or
29,400 MT, on the previous
comparable period.
Infant formula, fluid milk
products, and whey powder
made up most of the growth
in Australian exports, up a
combined 47,800  MT.
NEW ZEALANDAUSTRALIAEUROPEAN UNIONUSA
%
%
%%
%
%
%%
Change for April 2019
compared to April 2018
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 the 12 months
to April 2019
Change for the 12 months
to April 2019
Change for the 12 months
to April 2019
Change for the 12 months
to March 2019
21.25.613.6
3.91.91.9
5.7
5.4

To view a chart that
illustrates year-on-year
changes in imports –
4
OUR MARKETS
GLOBAL IMPORTS
MONTHLY IMPORTS INTO
CHINA AND ASIA SHOW
STRONG GROWTH. LATIN
AMERICA AND MIDDLE EAST &
AFRICA  DOWN IN MARCH
Latin America dairy
import volumes¹ decreased
1.1%, or 1,900 MT, in March
compared to the same
period last year. This was
driven by declines in infant
formula, and whey powder,
down a combined 3,900  MT.
This was offset by lactose, up
2,400  MT.
Imports for the 12 months to
March 2019 were up 5.0%,
or 94,400 MT, compared to
the same period the previous
year. Increases were recorded
across a broad range of
products with SMP, fluid milk
products, and WMP up a
combined 81,400  MT.
Asia (excluding China)
dairy import volumes¹
increased 5.3% or
22,600 MT, in March
compared to the same
period last year. Increases
were recorded across a broad
range of products with SMP
up 21,600  MT.
Imports for the 12 months
to March were up 6.7%,
or 309,100 MT, compared
to the same period the
previous year. Growth
continues across a broad
range of products with fluid
milk products, SMP, WMP
and lactose up a combined
232,800  MT.
Middle East and Africa
dairy import volumes¹
decreased 6.0% or
22,400 MT in March 2019
compared to the same
period last year. Declines
were recorded principally
in cheese, SMP, butter, and
WMP down a combined
37,700 MT. This was partly
offset by growth in SMP of
20,200  MT.
Imports for the 12 months to
March 2019 were down 7.9%,
or 329,000 MT, compared
to the same period the
previous year. The reduction
was driven by cheese, fluid
milk products, SMP, butter
and WMP down a combined
300,800  MT.
China dairy import
volumes increased 31.5%, or
64,100 MT, in April compared
to the same period last year.
This was driven by increases
in WMP, fluid milk, infant
formula and SMP products
up a combined 76,300 MT
but offset by whey powder
which was down 11,500  MT.
Imports for the 12 months
to April were up 9.8%, or
268,900 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, fluid products and
lactose, which were up a
combined 277,200  MT.
LATIN AMERICAASIAMIDDLE EAST & AFRICACHINA
1 Estimates are included for those countries that have not reported data.
%
%
%%%
%%%
Change for March 2019
compared to March 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 March 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
31.55.31.1
6.77.99.8
6.0
5.0

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 31 May
For the 2018/19 Season compared
to Previous Season
For the 2018/19 Season compared
to Previous Season
For the 2018/19 Season compared
to Previous Season
Decrease for May 2019
compared to May 2018
Increase for May 2019
compared to May 2018
Decrease for May 2019
compared to May 2018
Decrease for May 2019
compared to May 2018
31.43.510.73.5
19.82.70.11.2
VOLUME M LITRESDAY
JUNJULAUGSEPOCTNOVDECJANFEBMARAPRMAY










5
OUR MARKETS
FONTERRA MILK COLLECTION 2018/19 SEASON
NEW ZEALANDNORTH ISLANDSOUTH ISLANDAUSTRALIA
NEW ZEALAND MILK COLLECTION
Fonterra’s milk collection
across Australia for the
eleven months to 31 May
reached 115 million kgMS,
down 19.8% on the same
period last season.
Fonterra collections in May
were 8 million kgMS, down
31.4% on May last season.
Fonterra’s share of monthly
collection continues to
reduce due to poor seasonal
conditions and high input
costs, leading to an increase
in cow cull rates, farm
exits in key regions, and
declining share in a highly
competitive market.
Dairy Australia continues to
forecast a milk production
decline of between 7% and
9% for the 2018/19 season.
Conditions recovered in the
Upper North regions by the
end of May, but too late to
provide meaningful impacts
on volumes.
Collections in May were
31 million kgMS, 10.7%
behind the same month
last season, with full
season collections reaching
893 million kgMS. This is
in line with last season’s
892 million kgMS.
Stronger production from
Central South Island
continued through May, with
a higher number of farms
than usual milking through
to the end of the season.
Collections in May were
37 million kgMS, 3.5%
higher than the same
month last season, with full
season collections reaching
629 million kgMS. This was
up 2.7% on last season.
Total collections for the
season were 1,523 million
kgMS, up 1.2% on last season
which was a weak
production season.
Conditions in May were
more favourable across many
regions compared to recent
months, but overall still 3.5%
behind the same month
last season. May production
last season was stronger
on the back of favourable
autumn conditions.
Forecast Milk Collection
for the 2019/20 season is
1,520 million kgMS.

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


,
, 
,
.
.
.
.
.
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 in May as
the Reserve Bank of
New Zealand lowered
interest rates, with additional
weakness ensuing as
increasing global trade
tensions led to general
safe-haven buying of the
US dollar.
Fonterra GDT results at
last trading event
18 June 2019:
The next trading event will be held on 2 July 2019. Visit www.globaldairytrade.info for more information.
Change in Fonterra’s
weighted average product
price from previous event
6.0
Fonterra’s weighted
average product price

(USD/MT)
3,280
USD
Fonterra product quantity
sold on GDT
000’ MT
23.6
NORTH ASIA (INCLUDING CHINA)
SOUTH EAST ASIA
MIDDLE EAST AND AFRICA
LATIN AMERICA
OTHER
USD 4,553/MT
5.2
BUTTER
USD 2,360/MT
3.5
SMP
USD 3,006/MT
4.2
WMP
USD 5,531/MT
3.9
AMF
USD 3,781/MT
4.3
CHEDDAR
USD 7,494/MT
4.1
RENNET CASEIN
23,633
MT
LATEST AUCTION
628,448
MT
FINANCIAL
YEAR‑TO‑DATE

Going organic: new
paediatrics powder
launched in China
Fonterra through NZMP
China has launched an
organic milk powder for
children to meet the
rising demand for organic
products in the world’s most
populous country.
The new premium
SureStart™ Organic
Formulated Paediatric Base
Powder is made from high-
quality organic milk from
certified New Zealand farms.
Our base powder ingredients
contain whey enriched
with vitamins, minerals and
other essential nutrients to
help support growth and
development in babies.
Teh-han Chow, President
of NZMP Greater China
and South & East Asia, says
demand for organic products
in China is growing fast.
“Chinese consumers are
particularly concerned about
where their food came from,
how it was made, and if it
was sustainably produced.
Many are choosing organic
products to help meet these
needs for themselves and
their families.”
While organic foods were
once viewed as a luxury item,
they have become more
accessible to middle-class
Chinese consumers with
rising incomes.
The organic food segment
in China has tripled since
2007, but still makes up only
a relatively low proportion
of the whole food market.
This means it has room to
grow and Fonterra (NZMP) is
positioning itself to make the
most of the opportunities
this budding market brings.
Teh-han says Chinese
consumers are increasingly
seeking the assurance
of organic certification,
especially for their children.
“Organic paediatric
ingredients can be difficult
to source. But our premium
range of organic base
powders allow infant
formula manufacturers and
brand owners to enter this
fast-growing segment and
differentiate their paediatric
formula brand.
“Better still, our organic
formulas are certified and
produced in accordance
with the organic standards,
from cow to customer. This
means manufacturers and
consumers in China trust
our products.
Fonterra offers farmers
new pricing tool with
Fixed Milk Price
June 2019 marked the first
opportunity for farmers to
use the new Fixed Milk Price
tool announced by Fonterra
late last year.
Farmer interest was
strong with 215 farmers
participating and applying to
fix just over 11 million kgMS.
The Fixed Milk Price offered
to farmers was $6.75 (less the
10c service fee), and a total
volume of 15 million kgMS
was available.
Fixed Milk Price joins seven
other financial tools that
support farmers in sharing
up and investing on farm.
It also enables the Co-op to
provide more price certainty
to its customers with fixed
price contracts.
Richard Allen, Group
Director of Farm Source,
says “as a Co-operative
owned by 10, 000 farming
families, we are committed
to finding solutions that will
help our farmers make their
businesses more sustainable
for the long term.”
“While most farms can
operate with some volatility,
some farmers can’t or aren’t
willing to take on as much
risk. Without a way to reduce
their risk, these farmers may
not enter dairy or may leave
the industry.
“If we can help them reduce
their exposure and stay in
the Co-op, while providing
greater price certainty for the
Co-op as well, it’s a win-win.”
Farmers will have up to
10 opportunities in a season
(excluding January and
February) to fix up to 50 per
cent of their individual total
estimated milk production
for the season.
Fonterra will make up to five
per cent of its total forecast
New Zealand milk collection
available to Fixed Milk Price.
The next application period
is expected to be 8-9 July.
7
OUR PERFORMANCE
To read more about
NZMP and SureStart™ –

Serial Entrepreneur
partners to solve
Fonterra’s sustainability
challenges
Professor Ian Hunter is a
serial entrepreneur. Born in
New Zealand, he started his
first company at age nine and
published his first scientific
paper at age 10.
Now living in Boston, he’s
the Professor of Mechanical
Engineering at MIT, the co-
founder of 25 companies, and
has more than 100 patents to
his name.
He’s also working on a new
project – a partnership with
Fonterra to solve some
of dairy farming’s biggest
sustainability challenges.
Specialising in micro
instrumentation and micro
robotics, Ian Hunter’s most
esteemed invention is that of
needle-free injection, giving
you the ability to medicate
intravenously without
breaking the skin. Further to
this, it connects with an app
on your smartphone, giving
you real time diagnostics
about blood composition
and the dosage levels of
medicine required.
His latest invention, Indigo,
has got the world’s biggest
car manufacturers talking.
In April, after 10 years of
stealth, Ian came out to
Forbes magazine showcasing
his electrically powered, fully
autonomous driving system
that could redefine the way
the world designs cars.
Ian believes that Indigo
will revolutionise vehicle
efficiency and drastically
reduce the impact
of transportation on
the environment.
It was at the Indigo
headquarters that Ian had his
first interaction with Fonterra,
on a Board trip in 2017.
Since then the relationship
has gone from strength to
strength, with Ian turning his
mind to how he can improve
farming systems in his home
country of New Zealand.
“I made the decision about
10 years ago to only work
on things whose mission
statement is around
sustainability and making
the lives of animals and
humans better.”
“I’ve spent the last year and
a half learning more about
Fonterra - how to grow
good quality grass, how to
minimise pollution when
fertilising. Also learning
about cows, who I think of as
machines that consume grass
and produce milk, but also
produce methane, urine and
cow dung.
“I think that we can do
something around these
areas of pollution by
rethinking a lot of on-farm
production. We can have
a future where the farm is
a closed eco-system,” says
Ian Hunter.
It’s early days but, alongside
Fonterra, Ian is exploring
how technologies he has
already developed can be
across our supply chain.
Possibilities include:
• Agrobot - using micro
instruments to analyse
soil content, provide
precision fertilising and
allow direct response to
nitrogen leeching concerns,
all while increasing
on-farm productivity.
• On-farm energy generation
and storage – harvesting
effluent to create biogas,
which is then used to fuel
farm operations.
• Redefining the way
that we transport milk
through a more efficient,
environmentally sustainable
tanker fleet.
Upon starting work with
Fonterra, Ian Hunter was
quick to suggest that we
work with another world
leading scientist based
out of the University of
Auckland - his brother,
Professor Peter Hunter.
Peter Hunter, currently the
Director of the Auckland
Bioengineering Institute, has
a lengthy list of accolades
to his name. Having
received New Zealand’s
premier science award,
the Rutherford medal in
2009, he was appointed to
the New Zealand Order of
Merit in 2010. He is also a
Fellow of the Royal Society
(London). Peter’s speciality
is computational modelling
of human systems and his
model of the human brain
is widely reported to be
world leading.
Peter’s help has been enlisted
to help crack one of our
industry’s most pressing
challenges: the reduction of
bovine methane emissions.
“Methane is very high on
the agenda of what we
want to look at. It’s not
yet possible to switch off
methane production within
a cow without there being
an impact on the taste of the
milk or on the cow.”
The solution could be in
better understanding the
cow’s rumen. With Peter, Ian
plans to develop a digital
model of the rumen. Data
from sensors placed on a cow
would feed into the digital
model, allowing us to monitor
the impacts on the rumen of
various inputs such as feed.
It’s fair to say a lot of work
is required before these
innovations are used in
practice. But you may see
an agrobot wandering the
paddocks sooner than you
may think.
“We hope to have the first
prototype up and running
before end of the year, and
within the next 12 months
we want to have our robot
onto our first farm,” says
Ian Hunter.
PROFESSOR IAN HUNTER
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 April; New Zealand and US to May.
NOTE: Data for EU to march; New Zealand, Australia and US to April.
NOTE: Data for Latin America, Asia, Middle East & Africa to March; China to April.
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)
M AY
2019
M AY

2018
MONTHLY
CHANGE
SEASON-
TO-DATE
2018/19
SEASON-
TO-DATE
2017/18
SEASON-
TO-DATE
CHANGE
Total Fonterra
New Zealand
68.470.9(3.5%)1,522.71,505.11.2%
North Island31. 134.8(10.7%)893.3892.00.1%
South Island37.336.13.5%629.5613.12.7%
Fonterra Australia8.111. 8(31.4%)115.1143.6(19.8%)
Fonterra GDT results
This table provides more
information on the latest
results, including a snapshot
of the year-to-date results.
LAST TRADING EVENT
(18 JUNE 2019)
YEAR-TO-DATE

(FROM 1 AUGUST 2018)
Quantity Sold on GDT
(Winning MT)
23,633628,448
Change in Quantity Sold on GDT
over same period last year
15.5%12.3%
Weighted Average Product Price
(USD/MT)
3,2803,089
Change in Weighted Average
Product Price over same period
last year
(8.7%)(8.4%)
Change in Weighted Average
Product Price from previous event
(6.0%)–
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.
NZMP
New Zealand Milk Products
(NZMP) is Fonterr'a global
brand of dairy ingredients.

GLOSSARY
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.
WPC
Whey Protein Concentrate