Global Dairy Update July 2019

• More farmers giving Fixed Milk Price a go.
1
GLOBAL DAIRY
UPDATE
JULY 2019
• Australia monthly production continues
decline, growth softening in the EU and small
decline in the US. New season starting in
New Zealand.
• Exports from New Zealand, the EU and
Australia continue to grow. Strong decline in
monthly US exports.
• Monthly imports into Asia show strong
growth. Latin America, China and Middle East
& Africa down.
• Fonterra’s New Zealand milk collection for
the first month of the 2019/20 season was
14.4 million kgMS, representing less than 1%
of the full season forecast.
• Stepping up our efforts to help tackle waste.
• No new coal boilers for Fonterra.
KEY DATES
September 2019
FY19 Annual Results
Announcement.
7 November 2019
Fonterra Annual Meeting
11 November 2019
Fonterra Shareholders' Fund
Annual Meeting
20 April 2020
Share Standard Compliance
2019/20 Season

To view a chart that
illustrates year-on-year
changes in production –
%
%
%%
%
%
%%
Change for June 2019
compared to June 2018
Change for June 2019
compared to June 2018
Change for May 2019
compared to May 2018
Change for May 2019
compared to May 2018
Change for the 12 months
to June 2019
Change for the 12 months
to June 2019
Change for the 12 months
to May 2019
Change for the 12 months
to May 2019
0.313.613.9
7.60.30.4
0.1
2.3
2
OUR MARKETS
GLOBAL PRODUCTION
AUSTRALIA MONTHLY
PRODUCTION CONTINUES
DECLINE, GROWTH
SOFTENING IN THE EU AND
SMALL DECLINE IN THE US.
NEW SEASON STARTING IN
NEW  ZEALAND
New Zealand milk
production was up 13.9% in
June compared to the same
period last year, on relatively
small winter volumes and
as a result of better weather
conditions this season than
last season.
New Zealand milk
production for the 12 months
to June was 2.3% higher than
last year.
Fonterra collections are
reported for June, see page 5
for details.
Australia milk production
decreased 13.6% in May
compared to the same
period last year.
Production for the 12 months
to May was down 7.6% on
the previous 12 months.
Dairy Australia forecasts
annual milk production to
decline by 7% to 9% for the
2018/19 season.
Dairy Australia are
forecasting a further decline
in the 2019/20 season
of 3% to 5% in total milk
production on the back
of reduced herd sizes and
strained farmer finances.
Fonterra collections in
Australia are reported for
June, see page 5 for details.
EU milk production
increased 0.1% in May
compared to the same
period last year.
Growth continues in Ireland,
though at a slightly slower
pace, up 10.8% in May.
The recent heatwave has
slowed down production
in Germany (1.5%), France
(1.6%) and The Netherlands
(2.5%) and led to abnormally
dry conditions that could
have a lasting effect on milk
production for the quarter.
EU milk production for the
12 months to May was up
0.3% compared to the same
period last year.
US milk production
decreased 0.3% in June,
compared to the same
period last year.
Poor on-farm 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 June was 0.4%
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, THE EU AND
AUSTRALIA CONTINUE TO
GROW. LARGE DECLINE IN
MONTHLY US  EXPORTS
Total New Zealand dairy
exports increased by
17.1%, or 42,203 MT, in May
compared to the same
period last year. This was
primarily driven by WMP
and fluid milk products,
up 34,200 MT. Butter
had the largest decline in
volume, down 3,400 MT for
the month.
Exports for the 12 months
to May were up 7.0%, or
229,800 MT, on the previous
comparable period. This was
primarily driven by WMP,
fluid milk products, AMF,
and infant formula, up a
combined 270,500 MT. SMP
was down 36,000  MT.
EU dairy exports increased
by 11. 5%, or 52,200 MT, in
April compared to the same
period last year. This was
primarily driven by fluid milk
products, SMP, butter, cheese
and lactose, up a combined
57,300 MT. This was partially
offset by declines in WMP
and whey powder, of a
combined 8,900  MT.
Exports for the 12 months
to April were up 2.7%,
or 144,200 MT, on the
previous comparable period.
SMP, lactose, WPC, fluid
milk products, MPC and
cheese were up a combined
240,100 MT. This was offset
by a 100,000 MT decline
in WMP, butter, AMF, and
cultured products.
US dairy exports declined
10.3%, or 23,300 MT, in
May compared to the same
period last year, driven by
declining imports of whey
powder by China due to
African Swine Fever, and
by declines in SMP, lactose,
WPC, butter and WMP, down
a combined 29,800 MT. This
was slightly offset by an
increase in cheese and fluid
milk products of 6,300  MT.
Exports for the 12 months
to May 2019 were down
4.1%, or 98,000 MT, on the
previous comparable period.
This was primarily driven
by a decline in whey, WPC
and lactose, down more
than 137,000 MT. This was
partially offset by increases
in fluid milk products
and cheese.
Australia dairy exports
increased by 1.7%, or
1,150 MT, in May compared
to the same period last year.
This was primarily driven
by fluid milk products and
infant formula, up 7,400  MT.
This was offset by declines in
SMP, whey and cheese, down
a combined 6,800  MT.
Exports for the 12 months
to May were up 3.8%, or
29,000 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
50,500 MT but partly offset
by a decline in WMP and
SMP, down 14,500 MT and
8,900 MT respectively.
NEW ZEALANDAUSTRALIAEUROPEAN UNIONUSA
%
%
%%
%
%
%%
Change for May 2019
compared to May 2018
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 the 12 months
to May 2019
Change for the 12 months
to May 2019
Change for the 12 months
to May 2019
Change for the 12 months
to April 2019
10.31.717.1
3.82.74.1
11.5
7.0

To view a chart that
illustrates year-on-year
changes in imports –
4
OUR MARKETS
GLOBAL IMPORTS
MONTHLY IMPORTS INTO
ASIA SHOW STRONG
GROWTH. LATIN AMERICA,
CHINA AND MIDDLE EAST &
AFRICA  DOWN
Latin America dairy
import volumes¹ decreased
13.6%, or 23,700 MT, in
April compared to the same
period last year. This was
driven by declines in SMP,
WMP, fluid milk products,
infant formula and whey
powder, down a combined
21,300  MT.
Imports for the 12 months
to April 2019 were up 2.5%,
or 48,300 MT, compared
to the same period the
previous year. Increases were
recorded across a broad
range of products with fluid
milk products, SMP, WMP
and MPC up a combined
60,600 MT. This was partially
offset by whey powder, down
by 12,200  MT.
Asia (excluding China)
dairy import volumes¹
increased 11. 2% or
44,700 MT, in April
compared to the same
period last year. Increases
were recorded across a
broad range of products with
cheese, WMP, SMP and fluid
milk products making up
the bulk of the increase, up
41,800  MT.
Imports for the 12 months
to April were up 6.7%, or
309,000 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
254,900  MT.
Middle East and Africa
dairy import volumes¹
decreased 4.8%, or
17,900 MT, in April 2019
compared to the same
period last year. Declines
were recorded principally in
WMP, cheese, other powders,
AMF and ice cream down a
combined 35,200  MT.
Imports for the 12 months to
April 2019 were down 8.9%,
or 373,200 MT, compared to
the same period the previous
year. The reduction has been
driven by cheese, fluid milk
products, WMP, SMP, butter
and other powders, down a
combined 362,200  MT.
China dairy import
volumes decreased 4.5%, or
11, 400 MT, in May compared
to the same period last year
driven by decreases in whey
powder, down 27,900  MT.
African Swine Fever has
impacted hog numbers in
China reducing demand
for whey as a feed. Lactose,
butter and infant formula also
contributed to the decline by
13,800 MT. This was partly
offset by fluid milk products,
up 28,900  MT.
Imports for the 12 months
to May were up 7.2%, or
202,500 MT, compared to the
same period last year. Strong
demand continued across
WMP, fluid products SMP,
infant formula, and lactose,
up a combined 270,100  MT.
LATIN AMERICAASIAMIDDLE EAST & AFRICACHINA
1 Estimates are included for those countries that have not reported data.
%
%
%%%
%%%
Change for April 2019
compared to April 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 April 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
4.511.213.6
6.78.97.2
4.8
2.5

To view a table that shows our
detailed milk collection in New
Zealand and Australia compared
to the previous season –
%
%
%%%
%%%
For the 2018/19 Season compared
to Previous Season
Season to date
1 June to 30 June
Season to date
1 June to 30 June
Season to date
1 June to 30 June
Change for June 2019
compared to June 2018
Change for June 2019
compared to June 2018
Change for June 2019
compared to June 2018
Change for June 2019
compared to June 2018
30.012.56.78.0
20.312.56.78.0
VOLUME M LITRESDAY
JUNJULAUGSEPOCTNOVDECJANFEBMARAPRMAY









5
OUR MARKETS
FONTERRA MILK COLLECTION
NEW ZEALANDNORTH ISLANDSOUTH ISLANDAUSTRALIA
NEW ZEALAND MILK COLLECTION
Fonterra’s milk collection
across Australia for the
2018/19 season was
122 million kgMS, down 20%
on last season. Fonterra
collections in June were
7 million kgMS, down 30%
on June last season.
Fonterra’s milk collection
has reduced due to poor
seasonal conditions, high
input costs, increased cow
cull rates, farm retirements
and milk collection
movement in a highly
competitive market.
Dairy Australia forecasts
annual milk production to
decline by 7% to 9% for
the 2018/19 season, with
production for the 12 months
to May down 7.7% on the
previous 12 months.
North Island milk collection
in June was 11.1 million kgMS,
up 6.7% on June last season.
The increase was primarily
driven by favourable
conditions across most
North Island regions.
South Island milk collection
in June was 3.2 million kgMS,
up 12.5% on June last season.
Southland and Otago
saw increased volumes
in June relative to last
season, from slightly better
pasture conditions.
Fonterra's collection for the
first month of the 2019/20
season, was 14.4 million
kgMS, up 8% on the
same month last season.
These volumes represent
less than 1% of the full
season forecast.
The start to the season
across both islands has been
led by a relatively mild winter
so far and good pasture
cover for this time of year.
Cow condition is also good
across the country.

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


,
,
,
.
.
.
.
.
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
strengthened in June
driven by general US dollar
weakness – a result of
increasing expectations
that US interest rates will
be lowered.
Fonterra GDT results at
last trading event
16 July 2019:
The next trading event will be held on 6 August 2019. Visit www.globaldairytrade.info for more information.
Change in Fonterra’s
weighted average product
price from previous event
3.0
Fonterra’s weighted
average product price

(USD/MT)
3,450
USD
Fonterra product quantity
sold on GDT
000’ MT
23.9
NORTH ASIA (INCLUDING CHINA)
SOUTH EAST ASIA
MIDDLE EAST AND AFRICA
LATIN AMERICA
OTHER
USD 7,044/MT
2.5
RENNET CASEIN
USD 3,074/MT
3.5
WMP
USD 5,523/MT
1.7
AMF
USD 3,869/MT
3.0
CHEDDAR
USD 4,406/MT
1.5
BUTTER
USD 2,536/MT
4.0
SMP
23,989
MT
LATEST AUCTION
676,309
MT
FINANCIAL
YEAR‑TO‑DATE

MORE
FARMERS
GIVING FIXED
MILK PRICE
A GO
More farmers are giving
Fonterra’s Fixed Milk
Price option a go with
more than 70% of
applicants in the second
application window held
this month trying it for
the first time. Nearly 30%
were applying for the
second time.
The applications from
over 290 farms saw a
participation increase of
35 per cent on the June
event. Farms applied for
more than 1  million kgMS
at a fixed price of $6.81
(less the service fee
of 10c).
15 million kgMS were
made available in July,
meaning that all farmers
received the volume
they requested.
Richard Allen, Group
Director Farm Source
said that the increase
in interest in the Fixed
Milk Price tool was great
to see.
“We added this tool to
the financial toolbox to
help give farmers more
certainty over volatile
milk prices, so to see an
increase in new farms
giving the Fixed Milk
Price a go is great.
“It’s also good to see
that farmers are fixing
in small increments
- reducing their risk
further by spreading
their participation out
across several application
opportunities,”
said Richard.
Larry Whetting, who
farms in Galatea applied
for his first Fixed Milk
Price allocation after
being told about it by
a friend.
“To be honest, it wasn’t
on my radar. But after
hearing about it, I spoke
to my local bank advisor
who pointed out the
benefits. The amount we
applied for covers our
fixed costs,” Larry said.
For farmers who are
thinking about using
the Fixed Milk Price
tool in the future, Larry
encourages them to
get in touch with their
bank and talk through
their options.
In July, most farms
applied for less than
30 per cent of their
estimated production,
suggesting that farmers
are using the tool to fix
small portions of their
milk supply monthly,
rather than fixing 50 per
cent all at once.
The next application
period is 12-13 August.
7
OUR PERFORMANCE

OUR CO-OP
8
Stepping up our efforts
to help tackle waste
Across New Zealand and
the world, households and
businesses are grappling with
the challenge of how to deal
with waste.
At Fonterra, we’ve been taking a
hard look at our own waste and
how we can reduce our impact.
Last year, we sent over 5,600
tonnes of waste to landfill, and
that’s still too much. So, we’ve
announced a target to send zero
solid waste to landfill by 2025.
To achieve zero waste globally,
we will need to address our
packaging, product waste and
construction waste across our
manufacturing sites.
That’s why we’ve also
announced a new target of
100% recyclable, reusable
or compostable packaging
by 2025.
Carolyn Mortland, Director
of Sustainability, says around
90% of Fonterra’s products
sold in New Zealand are already
recyclable, which is great
progress. “This new target
stretches across our global
footprint, which means we will
need to take a good look and
have a hard think about some of
the solutions to recycling.”
“These new targets are
ambitious, and will require
innovative thinking and
collaboration to meet them.
That means building on the
work we’re already doing with
Future Posts to recycle Anchor
milk bottles into fence posts,
and SKYCITY to turn bottles
into bathroom amenities.”
“We’re not the first to come
up with these kinds of targets,
but we believe that we have an
important role to play in doing
our bit, and perhaps inspiring
other brands and companies to
take their own impact on board.”
“It’s part of our wider efforts
to improve and reduce our
environmental footprint across
all aspects of our business. We
believe in putting sustainability
at the heart of everything we do.
We care about New Zealand’s
natural environment and are
committed to protecting and
regenerating it for generations
to come.”
“Tackling the packaging
problem won’t be easy. But
we can get there with a
collective effort by everyone
– from government, local and
regional councils, businesses,
scientists, community groups
and consumers.”
No new coal boilers
for Fonterra
Fonterra is shaving eleven
years off its coal target, as it
announces a new commitment
to reduce its reliance on coal.
This commitment is the
latest in a series of targets the
Co-operative has set as it looks
to embed sustainability at the
heart of everything it does.
These targets include:
• Reducing emissions by 30%
across all its manufacturing
operations by 2030 and
achieving net zero by 2050;
• Reducing water use by 20%
across manufacturing sites
by 2020;
• A tailored Farm Environment
Plan for every Fonterra farmer
by 2025;
• 100% recyclable, reusable
and compostable packaging
by 2025;
• Powering its Stirling site in
Otago with electricity rather
than coal.
Robert Spurway, Chief
Operating Officer for Global
Operations, says Fonterra has
put a stop to installing any
new coal boilers or increasing
capacity to burn coal.
“One of the emerging themes
in our strategy review is that
sustainability will be at the
heart of everything we do. As
part of this, we want to step up
our efforts to help New Zealand
transition to a zero-carbon
economy,” says Mr Spurway.
“Our farmer owners are already
some of the most efficient
producers of milk in the world.
We need to match them in
making sure our manufacturing
operations and wider
supply chain are as efficient
as possible.”
Mr Spurway says getting out
of coal is not as easy as flicking
a switch.
“Transitioning Fonterra’s
sites away from coal requires
a staged approach. We’re
determined to go as fast as we
can but there are a number of
practical challenges we have
to overcome.
“For example, right now
New Zealand’s energy
infrastructure in some parts of
the country simply isn’t set up
to handle our requirements.
Either there aren’t alternatives
to coal available or, if there
are, they are not at the
scale needed.
“There are also cost challenges.
Transitioning to cleaner
fuels will require additional
investment and we need to
balance this with remaining
competitive. It’s right to take a
staged approach.
“We know we can’t do it alone,”
says Mr Spurway. “More
can be achieved through
partnerships and business
working together, like the
Climate Leaders Coalition and
Sustainable Business Council,
to find ways to achieve a
zero-carbon economy.”
Fonterra’s manufacturing
operations are on track to meet
its targets to reduce emissions
by 30% across all its operations
by 2030 and achieve net zero
by 2050.
Fonterra has 32 manufacturing
sites across the country, of
which about 40% of its current
processing energy is from coal.
The rest is from natural gas,
electricity and wood.

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 May; New Zealand and US to June.
NOTE: Data for EU to April; New Zealand, Australia and US to May.
NOTE: Data for Latin America, Asia, Middle East & Africa to April; China to May.
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)
JUNE
2019
JUNE

2018
MONTHLY
CHANGE
SEASON-
TO-DATE
2019/20
SEASON-
TO-DATE
2018/19
SEASON-
TO-DATE
CHANGE
Total Fonterra
New Zealand
14.413.38.0%14.413.38.0%
North Island11. 110.46.7%11. 110.46.7%
South Island3.32.912.5%3.32.912.5%
MILK COLLECTION
(MILLION KGMS)
JUNE
2019
JUNE

2018
MONTHLY
CHANGE
SEASON-
TO-DATE
2018/19
SEASON-
TO-DATE
2017/18
SEASON-
TO-DATE
CHANGE
Fonterra Australia7.010.0(30.0%)122.0153.0(20.3%)
Fonterra GDT results
This table provides more
information on the latest
results, including a snapshot
of the year-to-date results.
LAST TRADING EVENT
(16 JULY 2019)
YEAR-TO-DATE

(FROM 1 AUGUST 2018)
Quantity Sold on GDT
(Winning MT)
23,989676,309
Change in Quantity Sold on GDT
over same period last year
(2.9%)10.8%
Weighted Average Product Price
(USD/MT)
3,4503,111
Change in Weighted Average
Product Price over same period
last year
6.0%(7.5%)
Change in Weighted Average
Product Price from previous event
3.0%–
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.

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