Global Dairy Update September 2019

•On 26 September Fonterra announced its Annual Results.
For further details view
our website –
1
GLOBAL DAIRY
UPDATE
SEPTEMBER 2019
•Still early in New Zealand season. EU and US
production flat. Australia continues to decline.
•Monthly exports from New Zealand, Australia
and the US decline. EU exports continue
to grow.
•
Monthly imports into China show strong
growth. Latin America, Asia and Middle East &
Africa down.
• Fonterra’s mil
k collection up 2% on last
season but it is still early in the season
with only 9% of forecast total season
production collected.
•Regenerating New Zealand’s waterways.
•
New targets to reduce water use.
KEY DATES
7 November 2019
Fonterra Annual Meeting
Invercargill
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 August 2019
compared to August 2018
Change for August 2019
compared to August 2018
Change for July 2019
compared to July 2018
Change for July 2019
compared to July 2018
Change for the 12 months
to August 2019
Change for the 12 months
to August 2019
Change for the 12 months
to July 2019
Change for the 12 months
to July 2019
0.28.40.8
8.40.10.3
0.5
2.0
2
OUR MARKETS
GLOBAL PRODUCTION
STILL EARLY IN
NEW  ZEALAND SEASON.
EU AND US PRODUCTION
FLAT. AUSTRALIA CONTINUES
TO  DECLINE
New Zealand mi
lk
production was up 0.8%
in August compared to
the same period last
year although it
is still
early in the season.
Season-to-date production
represents less
than 9% of
seasonal production.
New Zealand mi
lk
production for the 12 months
to August was 2% higher
than the same period last
year.
Fonterra collections are
reported for Au
gust, see
page 5 for details.
Australia milk production
decreased 8.4% in July
compared to the same
period last year.
Production for the 12 months
to July was down 8.4% on
the previous 12 months.
Dairy Australia is forecasting
2019/20 season production
to decline by 3% to 5%.
Fonterra collections in
Australia are reported
for August, see page 5
for details.
EU milk production
increased 0.5% in July
compared to the same
period last year.
Growth continues in Ireland,
up 10.4% in July 2019, driven
by a return to more normal
weather conditions following
challenging conditions
in 2018.
Key exporting countries
where production declined
were Germany (1.2%), France
(1 %) and The Netherlands
(1.5%) as very dry conditions
were reported for the month
of July.
EU milk production for
the 12 months to July was
stable with a movement of
0.1% compared to the same
period last year.
US milk production
increased slightly by 0.2%
in August, compared to the
same period last year.
Growth continues to be
limited by record low cow
numbers as poor on
-f
arm
profitability is leading to an
increase in culling.
Milk production for the
12 months to August was
0.3% 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
MONTHLY EXPORTS FROM
NEW  ZEALAND, AUSTRALIA
AND THE US DECLINE.
EU  EXPORTS CONTINUE
TO  GROW
Total New Zealand dairy
exports decreased by
11.7%, or 36,417 MT, in July
compared to the same
period last year. This was
primarily driven by WMP
and butter down a combined
43,137 MT. This was partially
offset by an increase in SMP
exports, up 8,985  MT.
Exports for the 12 months
to July were up 6.8%, or
219,726 MT, on the previous
comparable period. This was
primarily driven by WMP
and fluid milk products, up a
combined 198,077  MT.
EU dairy exports increased
by 6.7%, or 29,128 MT, in
June compared to the same
period last year. This was
primarily driven by SMP
and fluid milk products, up
28,180  MT.
Exports for the 12 months
to June were up, 5.4%, or
285,597 MT, on the previous
comparable period. SMP
fluid milk products and
lactose were the main
drivers of this growth, up
a combined 325,347  MT.
This was partially offset by
a decline in WMP, down
69,048  MT.
US dairy exports decreased
4.0%, or 7,539 MT, in July
compared to the same
period last year. SMP and
whey were the main drivers
of this decline, down a
combined 8, 550 MT. African
Swine Fever continues to
have a negative impact on
whey exports to China.
Exports for the 12 months to
July 2019 were down 7.4%, or
179,086 MT on the previous
comparable period.
The decrease was driven
by whey, SMP, WPC and
lactose, down a combined
197,780  MT.
Australia dairy
exports
decreased by 1.9%, or
1, 140 MT, in July compared
to the same period last
year. This was primarily
d
riven by SMP, whey, WMP
and cheese, down 5,776 MT
and largely offset by an
increase in fluid milk
products.
E
xports for the 12 months to
July were up 4.6%, or
34,798 MT, on the previous
comparable period.
Fluid milk products, infant
formula and butter were the
main drivers of this 12-
month growth, up a
combined 59,325 MT, while
WMP and cheese declined
by 22,849 MT.
NEW ZEALANDAUSTRALIAEUROPEAN UNIONUSA
%
%
%%
%
%
%%
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 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 July 2019
Change for the 12 months
to June 2019
4.01.911.7
4.65.47.4
6.7
6.8

To view a chart that
illustrates year-on-year
changes in imports –
4
OUR MARKETS
GLOBAL IMPORTS
MONTHLY IMPORTS INTO
CHINA SHOW STRONG
GROWTH. LATIN AMERICA,
ASIA AND MIDDLE EAST &
AFRICA DOWN
Latin America dairy
import volumes¹ decreased
7.5%, or 12,132 MT, in June
compared to the same
period last year. This was
driven by declines in cheese,
WMP and whey, down
a combined 14,164  MT.
Mexico and Peru are the
main countries behind
these declines.
Imports for the 12 months
to June 2019 were up 2.8%,
or 52,824 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 by a
combined 63,439  MT.
Asia (excluding China)
dairy import volumes¹
decreased 4.4% or 16,969  MT,
in June compared to the
same period last year.
Decreases were recorded
across a broad range of
products with WMP, infant
formula, cultured products,
SMP and whey down
15,566  MT.
Imports for the 12 months
to June were up 5.6%, or
261,529 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
238,526  MT.
Middle East and Africa
dairy import volumes¹
decreased 9.4% or 28,764 MT
in June 2019 compared to
the same period last year.
Decreases were recorded
principally in cheese, fluid
products, butter and SMP,
down a combined 19,858  MT.
Algeria imports remain low
as the country experiences
economic uncertainty, driving
weaker demand for powders.
Imports for the 12 months to
June 2019 were down 10.7%,
or 446,460 MT, compared
to the same period last year.
The decrease has been driven
largely by cheese, WMP, SMP
fluid milk products and other
powders, down a combined
393,905  MT.
China dairy import
volumes increased 14%, or
32,847 MT, in July compared
to the same period last
year. This was driven mainly
by increases in fluid milk
products, up 32,749 MT, and
smaller increases in SMP,
infant formula but partially
offset by decreases in butter
and whey, which were down
by 12,574  MT.
Imports for the 12 months
to July were up 9.3%, or
258,982 MT compared to the
same period last year.
Strong demand out of China
continued with imports across
all key categories; WMP, fluid
milk products and SMP were
up a combined 328,473  MT.
LATIN AMERICAASIAMIDDLE EAST & AFRICACHINA
1 Estimates are included for those countries that have not reported data.
%
%
%%%
%%%
Change for June 2019
compared to June 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 June 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
14.04.47.5
5.610.79.3
9.4
2.8

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 August
Season to date
1 June to 31 August
Season to date
1 June to 31 August
Season to date
1 June to 31 August
Change for August 2019
compared to August 2018
Change for August 2019
compared to August 2018
Change for August 2019
compared to August 2018
Change for August 2019
compared to August 2018
25.50.41.71.1
27.51.02.32.0
VOLUME M LITRESDAY
JUNJULAUGSEPOCTNOVDECJANFEBMARAPRMAY









5
OUR MARKETS
FONTERRA MILK COLLECTION
NEW ZEALANDNORTH ISLANDSOUTH ISLANDAUSTRALIA
NEW ZEALAND MILK COLLECTION
Fonterra’s milk collections in
August were 7 million kgMS,
down 25.5% on August
last season.
Fonterra collections across
Australia for the two months
to 31 August reached
12.4 million kgMS, down
27.5% on the same period
last season.
The combination of high
on-farm input costs,
challenging seasonal
conditions and heightened
competition for milk
continues to impact
Fonterra’s milk supply.
Dairy Australia is forecasting
2019/20 production to
decline by 3% to 5% on
prior season.
North Island milk collection
in August was 71.2 million
kgMS, up 1.7% on August
last season.
Season-to-date collection
was 98.7 million kgMS, up
2.3% on last season.
Central North Island was
the main contributor to
the increase this month.
Pasture conditions continue
to be above average for
the majority of farmers in
the region.
South Island milk collection
in August was 26.3 million
kgMS, down 0.4% on August
last season.
Season-to-date collection
was 31.6 million kgMS, up 1%
on last season.
Pasture conditions
remain strong across
the South Island, and
good animal health has
been reported.
Fonterra's total New Zealand
collection for August, was
97.6 million kgMS, up 1.1% on
the same month last season.
Season-to-date collection
was 130.3 million kgMS, up
2% on last season. These
volumes are still small in the
context of the full season
as is usual for this time of
the year.
Overall, most regions
have come through winter
reasonably well. August saw
a lot of days with rainfall
recorded, although total
rainfall was only marginally
above August last season.
Cow condition is good, and
pasture cover also generally
positive, resulting in milk
volumes slightly above
production for the same
month last season.

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


,
,
,
.

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.

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PRICE INDEX
NZD  USD
OUR MARKETS
FONTERRA GLOBAL DAIRY TRADE RESULTS
Fonterra GDT sales
by destination:
Dairy commodity prices
and New Zealand
dollar trend
A reduction in the
New Zealand Official Cash
Rate coupled with global
trade tensions stemming
from ongoing concerns for
US-China trade relations
resulted in the New Zealand
dollar weakening over the
month of August.
Fonterra GDT results at
last trading event
17 September 2019:
The next trading event will be held on 1 October 2019. Visit www.globaldairytrade.info for more information.
Change in Fonterra’s
weighted average product
price from previous event
2.6
Fonterra’s weighted
average product price

(USD/MT)
3,327
USD
Fonterra product quantity
sold on GDT
000’ MT
36.7
NORTH ASIA (INCLUDING CHINA)
SOUTH EAST ASIA
MIDDLE EAST AND AFRICA
LATIN AMERICA
OTHER
USD 6,636/MT
0.1
RENNET CASEIN
USD 4,129/MT
2.5
BUTTER
USD 5,030/MT
0.8
AMF
USD 3,133/MT
1.8
WMP
USD 3,846/MT
0.5
CHEDDAR
USD 2,607/MT
3.5
SMP
36,666
MT
LATEST AUCTION
141,645
MT
FINANCIAL
YEAR‑TO‑DATE

New targets to reduce water use
More than 3.4 billion litres
of water (or ab
out the same
as 1,350 Olympic swimming
pools) will be saved every
year under new water
ta rgets launched by Fonterra
this month.
The Co-operative has
announced that six
manufacturing sites in
water-constrained regions
will reduce their water use
by 3 0% by 2030 as part
of its move to accelerate
sustainability to the heart of
its strategy.
“Water is a precious resource
and we can’t take it for
granted. For some parts of
New Zealand, water isn’t
always in the right place at
the right time, and our water
use in these regions can put
stress on local water sources
and the communities
that rely on them, ” says
Fonterra Director NZ
Manufacturing Alan van der
Nagel.
“Reducing our water use at
our manufacturing sites is
the right thing to do for the
environment and for the
communities we operate in.
That’s why we’ve set this
new target, which will save
billions of litres of water.”
The six sites are
Maungatoroto, Lichfield,
Brightwater, Darfield,
Edendale and Clandeboye.
M
r van der Nagel says taking
a targeted approach will
ultimately result in better
efficiency and outcomes.
“We’ve focused on the six
sites where major water
savings can have the
greatest impact. This means
we can target efforts and
investment into those
regions most
in need.”
All other sites across
Fonterra’s entire
manufacturing footprint will
take steps to keep water use
to FY18 baselines.
“Some initiatives are
underway with more in the
pipeline. This target will
require some clever ideas
and creative thinking. But
our site teams are already
rising to the challenge.”
This target is the latest in
a series of commitments
the Co-operative has set
as it embeds sustainability
at the heart of its strategy.
These include:
•No more coal boilers or
increasing capacity to
burn coal
•Reducing emissions by 30%
across all manufacturing
operations by 2030, on the
way to net zero by 2050
•Improving the energy
intensity of our sites by
20% by 2020
•No s
olid waste to landfills
by 2025
•
100% recyclable, reusable
and compostable packaging
by 2025
•A tailored farm
environment plan for every
Fonterra farmer by 2025
•F
arm-specific emissions
reports for every Fonterra
farmer by the end of
this season.
Fonterra cares about water,
whether it’s on-farm or at our
manufacturing sites. More
information about our efforts
to look after water can be
found on our website –
Here’s some of the
things we’re doing across
New Zealand to help
our waterways –
OUR CO-OP
7
Regenerating New Zealand’s waterways
Last month, countries around
the globe marked World
Water Week, an annual focal
point for global water issues.
It’s a time when thousands
of decision-makers, scientists
and experts from over
130 countries converge on
Sweden to swap ideas and
develop plans to preserve this
precious natural resource.
A little closer to home,
communities all over
New Zealand are helping to
restore waterways in their
local areas. We want to do
our bit too.
Our streams, lakes, wetlands
and rivers have suffered over
the last 150 years because
of the effects of agriculture.
Many of them aren’t in the
condition we all want them
to be. We acknowledge we’ve
been part of the problem
and want to help regenerate
our water waterways for all
New Zealanders to enjoy
and return them to places
where nature, birds and fish
can thrive.
Dairy farmers have spent
around $1 billion on
on
-farm initiatives to help
restore our waterways. This
includes upgrading effluent
management systems,
fencing streams and rivers,
putting in bridges to keep
stock out of waterways,
and reducing run
-off with
riparian planting.
That’s a big investment and
has helped us make some
progress. But there’s more to
be done, and it must be done
fast, and together.
We’ve committed to
building on this good
work and making a
meaningful difference.
There isn’t a silver bullet
or a quick fix to restore
our waterways.
We know our efforts are only
part of tackling the problem,
and it may take longer than
some of us would like, but
we’re committed to playing
our part to make things right
and are looking forward
to working with others on
the challenge.

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

2018
MONTHLY
CHANGE
SEASON-
TO-DATE
2019/20
SEASON-
TO-DATE
2018/19
SEASON-
TO-DATE
CHANGE
Total Fonterra
New Zealand
97.696.51.1%130.3127.72.0%
North Island71.270.01.7%98.796.52.3%
South Island26.426.5(0.4%)31.631.21.0%
Fonterra Australia7.09.4(25.5%)12.417.1(27.5%)
Fonterra GDT results
This table provides more
information on the latest
results, including a snapshot
of the year-to-date results.
LAST TRADING EVENT
(17 SEPTEMBER 2019)
YEAR-TO-DATE

(FROM 1 AUGUST 2019)
Quantity Sold on GDT
(Winning MT)
36,666141,645
Change in Quantity Sold on GDT
over same period last year
(4.6%)0.5%
Weighted Average Product Price
(USD/MT)
3,3273,292
Change in Weighted Average
Product Price over same period
last year
12.4%8.1%
Change in Weighted Average
Product Price from previous event
2.6%–
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