Global Dairy Update August 2019

• Annual Results FY19 to be announced on 12 September 2019.
1
GLOBAL DAIRY
UPDATE
AUGUST 2019
• Australia production continues to decline. EU
and US production flat. Small volumes of early
season New Zealand production.
• Exports from Australia and the EU continue to
grow. Large decline in monthly US exports.
• Monthly imports into Middle East & Africa
show large decline. China, Latin America and
Asia imports continue to grow.
• Fonterra’s early season milk collection across
New Zealand for the two months to 31 July
reached 32.7 million kgMS, representing only
around 2% of the full season forecast.
• Every farm to get a unique biological emissions profile.
KEY DATES
12 September 2019
FY19 Annual Results
Announcement.
7 November 2019
Fonterra Annual Meeting
Invercargill
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 July 2019
compared to July 2018
Change for July 2019
compared to July 2018
Change for June 2019
compared to June 2018
Change for June 2019
compared to June 2018
Change for the 12 months
to July 2019
Change for the 12 months
to July 2019
Change for the 12 months
to June 2019
Change for the 12 months
to June 2019
0.09.94.8
8.20.10.3
0.3
2.2
2
OUR MARKETS
GLOBAL PRODUCTION
AUSTRALIA PRODUCTION
CONTINUES TO DECLINE,
EU AND US PRODUCTION
FLAT. SMALL VOLUMES OF
EARLY SEASON NEW  ZEALAND
PRODUCTION
New Zealand milk
production in July was
23.5 million kgMS, up 4.8%
compared to the same
period last year. June and
July account for only a
small proportion of total
milk production for the full
season. The increase over
last season partly represents
good conditions at the
start of the season and
supply is also supported by
winter milk.
New Zealand milk
production for the 12 months
to July was 2.2% higher than
last year.
Fonterra collections are
reported for June, see page 5
for details.
Australia milk production¹
decreased 9.9% in June
compared to the same
period last year.
Production for the 12 months
to June was down 8.2% on
the previous 12 months.
Dairy Australia are
forecasting a 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
decreased 0.3% in June
compared to the same
period last year.
A slowdown in production
due to the recent heatwave,
impacted Germany
(2.3%), The Netherlands
(2.7%), Spain (2.1%) and
Finland (5%).
Production in Ireland
continues to grow, up 7.5% in
June versus the same period
last year.
EU milk production for the
12 months to June was up
0.1% compared to the same
period last year.
US milk production
remained stable at
8 billion MT in July, compared
to the same period last year.
The lack of production
growth continues as poor
on-farm profitability is
leading to an increase
in culling.
Milk production for the
12 months to July was up
0.3% compared to the same
period last year.
NEW ZEALANDAUSTRALIAEUROPEAN UNIONUSA
1 Australian production for June 2019 is an estimate based on IFCN milk production figures.

To view a chart that
illustrates year-on-year
changes in exports –
3
OUR MARKETS
GLOBAL EXPORTS
EXPORTS FROM AUSTRALIA
AND THE EU CONTINUE TO
GROW. LARGE DECLINE IN
MONTHLY US  EXPORTS
Total New Zealand dairy
exports decreased by 0.2%,
or 410 MT, in June compared
to the same period last
year. This was primarily
driven by butter and AMF,
down 9, 700 MT but mostly
offset by a WMP increase of
7, 326  MT.
Exports for the 12 months
to June were up 8.4%, or
272,002 MT, on the previous
comparable period. This
was primarily driven by a
significant increase in WMP
and fluid milk products, up a
combined 250,000  MT.
EU dairy exports increased
by 5.9%, or 28,049 MT, in
May compared to the same
period last year. This was
primarily driven by SMP, fluid
milk products and butter, up
a combined 32,477 MT. This
was partially offset by WMP,
down 5, 993  MT.
Exports for the 12 months
to May were up 3.7%, or
199,704 MT, on the previous
comparable period.
SMP, lactose and fluid
milk products were up a
combined 255,738 MT. This
was offset by a 75,231 MT
decrease in WMP.
US dairy exports decreased
12%, or 24,978 MT, in June
compared to the same
period last year. Whey
exports to China continue to
decline (7,778 MT) as a result
of the African Swine Fever.
Declines were also reported
in SMP and cheese, down a
combined 18,669  MT.
Exports for the 12 months to
June 2019 were down 6.3%,
or 151,577 MT on the previous
comparable period.
The decrease was largely
driven by whey powder,
WPC, lactose and SMP, down
a combined 177,916  MT.
Australia dairy exports
increased by 10.3%, or
6, 545 MT, in June compared
to the same period last year.
This was driven by fluid milk
products, up 9,643 MT, and
partially offset by cheese
and whey powder, down a
combined 2, 847  MT.
Exports for the 12 months
to June were up 5.1%, or
38,835 MT, on the previous
comparable period.
Fluid milk product and
infant formula are the main
drivers of this increase, up a
combined 56,059 MT. WMP
and SMP declined 19,002  MT,
partially offsetting the
12 months’ growth.
NEW ZEALANDAUSTRALIAEUROPEAN UNIONUSA
%
%
%%
%
%
%%
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 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 June 2019
Change for the 12 months
to May 2019
12.010.30.2
5.13.76.3
5.9
8.4

To view a chart that
illustrates year-on-year
changes in imports –
4
OUR MARKETS
GLOBAL IMPORTS
MONTHLY IMPORTS INTO
MIDDLE EAST & AFRICA
SHOW LARGE DECLINE.
CHINA, LATIN AMERICA AND
ASIA IMPORTS CONTINUE
TO  GROW
Latin America dairy
import volumes¹ increased
1.5%, or 2,611 MT, in May
compared to the same
period last year. This was
driven by SMP, cheese
and WPC up a combined
7,674 MT and partially
offset by decreases in
infant formula and cultured
products, down a combined
3,957  MT.
Imports for the 12 months to
May 2019 were up 3.1%, or
59,775 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 56,389  MT.
Asia (excluding China)
dairy import volumes¹
increased 0.2% or 742 MT, in
May compared to the same
period last year. Increases
were recorded across WMP,
WPC, infant formula and
butter, up a combined
10,647 MT and largely offset
by decreases in cultured
products, SMP, Whey powder
and AMF, down a combined
10,218  MT.
Imports for the 12 months
to May were up 6.1%, or
283,317 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 241,818 MT.
Middle East and Africa
dairy import volumes¹
decreased 24.5% or 94,891 MT
in May 2019 compared to
May last year. Decreases
were recorded in fluid milk
products, cheese, WMP,
cultured products and SMP,
down a combined 82,431  MT.
The main driver is lower
imports by Algeria as political
instability creates economic
uncertainty and drives weaker
demand in powders.
Imports for the 12 months to
May 2019 were down 11.4%,
or 482,050 MT, compared to
the same period last year. The
reduction has been driven by
cheese, fluid milk products,
WMP, SMP and other
powders down a combined
424,344  MT.
China dairy import
volumes increased 2.8%, or
6,163 MT, in June compared to
the same period last year. This
was driven by increases in
fluid, WMP, SMP and cheese,
up a combined 33,283 MT but
largely offset by whey, which
was down 21,900 MT. African
swine fever continues to have
a significant impact on whey
imports as hog numbers
decline along with demand
for feed.
Imports for the 12 months
to June were up 8.4%, or
232,321 MT, compared to
the same period last year.
Strong demand out of China
continued with imports across
all key categories; WMP, fluid
products and SMP were up a
combined 279,352  MT.
LATIN AMERICAASIAMIDDLE EAST & AFRICACHINA
1 Estimates are included for those countries that have not reported data.
%
%
%%%
%%%
Change for May 2019
compared to May 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 May 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
2.80.21.5
6.111.48.4
24.5
3.1

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 July
Season to date
1 June to 30 July
Season to date
1 June to 30 July
Season to date
1 June to 30 July
Change for July 2019
compared to July 2018
Change for July 2019
compared to July 2018
Change for July 2019
compared to July 2018
Change for July 2019
compared to July 2018
28.92.72.12.2
28.98.64.04.7
VOLUME M LITRESDAY
JUNJULAUGSEPOCTNOVDECJANFEBMARAPRMAY









5
OUR MARKETS
FONTERRA MILK COLLECTION
NEW ZEALANDNORTH ISLANDSOUTH ISLANDAUSTRALIA
NEW ZEALAND MILK COLLECTION
Fonterra’s milk collections
across Australia for the
first month of the 2019/20
season were 5.4 million
kgMS, a decline of 28.9%
on July last season.
This represents a small
percentage of the full
year's collection.
Fonterra’s milk collection
share continues to decline,
impacted by intense
competition for milk supply
and the continued impact of
the poor conditions on-farm.
The drought in 2019 has led
to an increase in cow cull
rates, a significant number
of farm retirements and a
continuation of historically
high input costs resulting in
a material reduction to the
Australian milk pool in FY19
versus FY18.
North Island milk collections
in July were 16.4 million
kgMS, up 2.1% on July
last season.
Season to date collections
were 27.5 million kgMS, up
4% on last season.
The increase was primarily
driven by generally
favourable conditions across
much of the North Island,
particularly in Northland and
the lower North Island.
South Island milk collections
in July were 1.9 million kgMS,
up 2.7% on July last season.
Season to date collections
were 5.2 million kgMS, up
8.6% on last season.
Otago and Southland were
the main contributors to this
increase, although volumes
were still typically small in
relation to the full season.
Fonterra's July collections
were 18.3 million kgMS, up
2.2% on the same month
last season.
Season to date collections
were 32.7 million kgMS, up
4.7% on last season. This
represents only around 2%
of full season collections.
These volumes are small in
the context of the full season
which is usual at this time of
the year. The increase over
July last year is also small
and is due to a relatively
mild July across much of the
country supporting good
pasture cover.

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



,
,
,
.
.
. 
.

. 
PRICE INDEX
NZD  USD
OUR MARKETS
FONTERRA GLOBAL DAIRY TRADE RESULTS
Fonterra GDT sales
by destination:
Dairy commodity prices
and New Zealand
dollar trend
Expectations for a softening
in world growth, driven
largely by heightened risks
to global trade, resulted in a
mildly weaker New Zealand
dollar by the end of July.
Fonterra GDT results at
last trading event
20 August 2019:
The next trading event will be held on 3 September 2019. Visit www.globaldairytrade.info for more information.
Change in Fonterra’s
weighted average product
price from previous event
0.1
Fonterra’s weighted
average product price

(USD/MT)
3,299
USD
Fonterra product quantity
sold on GDT
000’ MT
33.2
NORTH ASIA (INCLUDING CHINA)
SOUTH EAST ASIA
MIDDLE EAST AND AFRICA
LATIN AMERICA
OTHER
USD 6,348/MT
7.8
RENNET CASEIN
USD 3,857/MT
0.5
CHEDDAR
USD 4,025/MT
3.4
BUTTER
USD 2,499/MT
0.4
SMP
USD 5,061/MT
3.5
AMF
USD 3,100/MT
2.0
WMP
33,213
MT
LATEST AUCTION
66,783
MT
FINANCIAL
YEAR‑TO‑DATE

OUR CO-OP
7
Every farm to get a
unique biological
emissions profile
When it comes to making
change on farm, it takes
time, effort and money.
Our farmer owners are
committed to reducing
their on-farm emissions but
to do so in a meaningful,
significant and sustainable
way, their decisions must be
supported by clear data and
science-based evidence.
The fact is, our farmer
owners have a low
understanding of the sources
of greenhouse gas emissions
on their farms, and what
type of things they can do to
reduce their emissions. The
data speaks for itself.
In December 2018, the
Biological Emissions
Reference Group (BERG)
found that 98% of farmers
do not know their emissions
and more than 40% did
not know how to reduce
emissions on their farm.
Fonterra recently introduced
The Co‑operative
Difference to make it easier
for farmers to know what
is expected, and recognise
those who are taking steps
to produce high quality milk
in a more sustainable way.
The Co-operative Difference
outlines what great looks
like as a marker of where we
need to be and one of our
aspirational goals is to have
greenhouse gases emissions
quantified and reduced.
To learn how we could
quantify on-farm biological
emissions, Fonterra
undertook a recording pilot
involving 113 farms – of all
sizes and geographies. This
project has given confidence
that the accurate estimation
of biological greenhouse
gas emissions can be done
at scale.
We used the information
provided by farmers annually
in their Farm Dairy Records
to complete a robust
estimation of on-farm
biological greenhouse gas
emissions and produced
reports for the pilot farms
in the 2016/2017 and
2017/2018 seasons.
Feedback from the
farmers within the
pilot was exceedingly
positive, with over 90%
of participants saying that
the reports improved their
understanding of biological
greenhouse gases on farm.
Our Sustainable Dairying
and on-farm R&D team,
with technical support
from AgResearch, will use
the modelling methods
developed during this pilot
to estimate greenhouse gas
emissions for all farms. A
New Zealand first!
Charlotte Rutherford,
Director for On-Farm
Excellence, says a key part
of achieving emissions
reductions is having a clear
understanding of where we
stand today.
“New Zealand farmers are
already some of the most
carbon-efficient in the
world. This has come about
through significant research
and investment, and a
willingness and ability to
adapt over time.
“We still have work to do so
getting a clear baseline for
each farm will be central to
moving forward.”
Tracy Brown, Matamata
farmer and Chair of the
DairyNZ Dairy Environment
Leaders Forum, says that
when it comes to reducing
on-farm emissions, no one
farm is going to have the
same solutions as the other.
“A significant New Zealand
reduction will only come
once all farms have done
what they can, according to
their individual production
system, to reduce
their emissions.
“These emission profiles
are a necessary first step to
doing just that – giving each
farm a clear picture of where
they stand and how much
they might need to do.”
Our Co-op will start
providing these unique farm
reports in Spring 2020.
Similar to the nitrogen
reports that we have
been providing our farmer
owners for six seasons, the
emission profile will be
provided at no additional
cost, and won’t require our
farmer owners to provide
any more information than
they already do or have a
farm audit.

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
8

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 Australia and EU to June; New Zealand and US to July.
NOTE: Data for EU to May; New Zealand, Australia and US to June.
NOTE: Data for Latin America, Asia, Middle East & Africa to May; China to June.
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
9

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)
J U LY
2019
J U LY

2018
MONTHLY
CHANGE
SEASON-
TO-DATE
2019/20
SEASON-
TO-DATE
2018/19
SEASON-
TO-DATE
CHANGE
Total Fonterra
New Zealand
18.317.92.2%32.731.24.7%
North Island16.416.02.1%27.526.54.0%
South Island1.91.92.7%5.24.88.6%
Fonterra Australia5.47.6(28.9%)5.47.6(28.9%)
Fonterra GDT results
This table provides more
information on the latest
results, including a snapshot
of the year-to-date results.
LAST TRADING EVENT
(20 AUGUST 2019)
YEAR-TO-DATE

(FROM 1 AUGUST 2019)
Quantity Sold on GDT
(Winning MT)
33,21366,783
Change in Quantity Sold on GDT
over same period last year
5.8%3.4%
Weighted Average Product Price
(USD/MT)
3,2993,301
Change in Weighted Average
Product Price over same period
last year
7.3%5.8%
Change in Weighted Average
Product Price from previous event
(0.1%)–
Fonterra GDT Results
This chart shows Fonterra
GDT prices and volumes over
the past 12 months.

10
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