Global Dairy Update October 2019

• India’s foodservice sector has a new partner in Anchor™
Food Professionals.
1
Global Dairy
UPDATE
OCTOBER 2019
• Early season production in New Zealand in line
with last season. US and EU production flat
12 months.
• Exports from New Zealand and the EU show
strong growth. US and Australia monthly
exports continue to decline.
• China, Asia and Latin America imports
increase. Middle East & Africa monthly
imports down.
• Fonterra’s milk collection across New Zealand
reached 309 million kgMS, up 0.8% on last
season and accounts for 20% of forecast total
season production.
• Fonterra appoints Chief Operating Officer.
• Fonterra GoodSorts taking GoodYarn to the next level.
Key Dates
7 November 2019
Fonterra Annual Meeting
Invercargill
11 November 2019
Fonterra Shareholders' Fund
Annual Meeting Auckland
November/December 2019
FY20 Q1 Business Update
20 April 2020
Share Standard Compliance
2019/20 Season

%
%
%%
%
%
%%
Change for September 2019
compared to September 2018
Change for September 2019
compared to September 2018
Change for August 2019
compared to August 2018
Change for August 2019
compared to August 2018
Change for the 12 months
to September 2019
Change for the 12 months
to September 2019
Change for the 12 months
to August 2019
Change for the 12 months
to August 2019
1.35.90.7
6.20.00.3
1.0
1.2
2
OUR MARKETS
Global Production
Early season production in
New Zealand in line with
last season. US and EU
production flat 12 months
New Zealand milk
production¹ was down
0.7% on a litre basis but was
up 0.7% on a milk solids basis
in September compared to
the same period last year. The
variance between milk solids
and liquid milk indicates
improved pasture quality
from last September.
Despite several cold snaps
in parts of the South Island,
average temperatures were
recorded across much of the
country and on-farm pasture
conditions remain good.
New Zealand milk production
for the 12 months to
September was 1.2% higher
than last year.
Fonterra collections are
reported for September, see
page 5 for details.
Australia milk
production decreased 5.9%
in August compared to the
same period last year.
Production for the 12 months
to August was down 6.2% on
the previous 12 months.
The Bureau of Meteorology
spring/summer forecasts
are for well-below-average
rainfall and well-above-
average temperatures
across the majority of
Australia which will
continue to pressure on milk
production if the seasonal
forecast materialises.
Fonterra collections in
Australia are reported for
September, see page 5
for details.
EU milk production
increased by 1.0% in August
compared to the same
period last year.
Production growth was
seen from key exporting
countries such as Poland
(2.2%), Spain (3.5%), Ireland
(2.2%), Germany (0.6%), and
France (0.8%).
EU milk production for the
12 months to August was
flat compared to the same
period last year. Significant
increases in Ireland, United
Kingdom and Poland’s yearly
production were offset by
large declines in production
in the Netherlands, France
and in Italy.
US milk production
increased by 1.3% in
September compared to the
same period last year.
Despite a continued decline
in cow numbers, an increase
in milk per cow in September
drove production higher
and may indicate a return
to production growth in the
coming months.
Milk production for the 12
months to September 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 production –
1 New Zealand production is measured in litres.

To view a chart that
illustrates year-on-year
changes in exports –
3
OUR MARKETS
Global Exports
Exports from New Zealand
and the EU show strong
growth. US and Australia
monthly exports continue
to decline
Total New Zealand dairy
exports increased by 11.9%,
or 14,088 MT, in August
compared to the same
period last year. This was
primarily driven by fluid milk
products, SMP and infant
formula, up a combined
18,500 MT. This was partially
offset by a decrease in butter
and AMF exports, down a
combined 4,515  MT.
Exports for the 12 months
to August were up 7.0%, or
228,808 MT, on the previous
comparable period. This was
primarily driven by WMP
and fluid milk products, up a
combined 206,348  MT.
EU dairy exports
increased by 9.3%, or
44,264 MT, in July compared
to the same period last year.
This was driven by increases
across all products but
primarily by SMP, butter,
cheese and casein, up
30,990  MT.
Exports for the 12 months
to July were up, 5.9%, or
314,183 MT, on the previous
comparable period. SMP
fluid milk products, lactose
and cheese were the main
drivers of this growth, up
a combined 345,172  MT.
This was partially offset by
a decline in WMP, down
62,720  MT.
US dairy exports
decreased 11. 3%, or
23,723 MT, in August
compared to the same
period last year. SMP, whey,
lactose and WPC were the
main drivers of this decline,
down a combined 24,910  MT.
The downturn in whey for
feed as a result of African
swine fever continues to
have a negative impact on
whey exports to China.
Exports for the 12 months
to August 2019 were down
9.2%, or 223,761 MT on the
previous comparable period.
The decrease was driven
by whey, SMP, WPC and
lactose, down a combined
241,593  MT.
Australia dairy exports
decreased by 6.0%, or
3,449 MT, in August
compared to the same
period last year. This was
primarily driven by SMP,
cheese, infant formula and
whey, down a combined
8,591 MT but largely offset
by an increase in fluid milk
products of 6,896  MT.
Exports for the 12 months
to August were up 3.5%, or
26,613 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
63,131 MT while WMP,
cheese and SMP declined by
33,349  MT.
NEW ZEALANDAUSTRALIAEUROPEAN UNIONUSA
%
%
%%
%
%
%%
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 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 August 2019
Change for the 12 months
to July 2019
11.36.011.9
3.55.99.2
9.3
7.0

To view a chart that
illustrates year-on-year
changes in imports –
4
OUR MARKETS
Global Imports
China, Asia and
Latin America imports
increase. Middle East
& Africa monthly
imports down
Latin America dairy
import volumes¹ increased
9.8%, or 15,703 MT, in July
compared to the same
period last year. This was
driven by increases in WMP,
SMP, fluid milk products
and WPC, up a combined
15,878  MT.
Mexico and Peru are the
main drivers behind the
year-on-year fluctuation.
Imports for the 12 months to
July 2019 were up 3.6%, or
67,985 MT, compared to the
same period the previous
year. Increases were recorded
across a broad range of
products with SMP, WMP,
and fluid milk products up by
a combined 76,440  MT.
Asia (excluding China)
dairy import volumes¹
decreased 1.1% or 4,676  MT,
in July compared to the same
period last year. Decreases
were recorded across a broad
range of products with SMP,
infant formula, ice cream
and fluid products down
10,634 MT but partially offset
by increases in whey, MPC
and cheese, up 6,876  MT.
Imports for the 12 months
to July were up 5.1%, or
240,404 MT, compared to
the same period the previous
year. Growth continues
across a broad range of
products with SMP, fluid milk
products, WMP and lactose
up a combined 223,312  MT.
Middle East and Africa
dairy import volumes¹
decreased 4.5% or 15,725 MT
in July 2019 compared to the
same period last year.
Decreases were recorded
principally in fluid milk
products, butter and WMP,
down a combined 28,993 MT
but partially offset by an
increase of 12,067 MT in
infant formula. Libya is the
main driver of the decline in
fluid milk products imports.
Imports for the 12 months
to July 2019 were down
5.7% compared to the same
period last year, driven
largely by cheese and
WMP, down a combined
186,525  MT.
China dairy import
volumes increased 4.7%, or
11, 912 MT, in August compared
to the same period last year.
This was driven by increases in
fluid milk products, SMP and
infant formula, up 25,668  MT,
but partially offset by
decreases in WMP and butter,
down by 13,969  MT.
Imports for the 12 months
to August were up 9.5%, or
264,857 MT compared to
the same period last year.
Strong demand continued
across all key categories.
Fluid milk products, WMP,
SMP and infant formula were
up a combined 382,293  MT,
partially offset by a continuing
decline in whey, down
90,936 MT, due to ongoing
African swine fever.
LATIN AMERICAASIAMIDDLE EAST & AFRICACHINA
1 Estimates are included for those countries that have not reported data.
%
%
%%%
%%%
Change for July 2019
compared to July 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 July 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
4.71.19.8
5.15.79.5
4.5
3.6

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 September
Season to date
1 June to 30 September
Season to date
1 June to 30 September
Season to date
1 June to 30 September
Change for September 2019
compared to September 2018
Change for September 2019
compared to September 2018
Change for September 2019
compared to September 2018
Change for September 2019
compared to September 2018
15.22.11.10.1
22.11.11.70.8
VOLUME M LITRESDAY
JUNJULAUGSEPOCTNOVDECJANFEBMARAPRMAY









5
OUR MARKETS
Fonterra Milk Collection 2019/20 Season
NEW ZEALANDNORTH ISLANDSOUTH ISLANDAUSTRALIA
New Zealand Milk Collection
Fonterra's Australia
collections in September
were 10.7 million kgMS,
down 15.2% on September
last season.
Fonterra collections across
Australia for the three
months to 30 September
reached 23.2 million kgMS,
down 22.1% on the same
period last season.
The combination of high
on-farm input costs, poor
seasonal conditions across
Australia, reduced herd
numbers and intense
competition for milk is
impacting 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 September was
112.1 million kgMS, up 1.1% on
last September.
Season to date collection
was 210.9 million kgMS, up
1.7% on last season.
Favourable conditions are
expected to continue for
the North Island. These
conditions have contributed
to the slight increase in
collections for September.
South Island milk
collection in September was
66.9 million kgMS, down
2.1% on last September.
Season to date collection
was 98.5 million kgMS, down
1.1% on last season.
Cooler weather has seen
South Island collections
marginally down relative to
the same period last year.
Pasture cover remains strong.
Fonterra's New Zealand
collection for September,
was 179.1 million kgMS, down
0.1% on the same month
last season.
Season to date collection
was 309.4 million kgMS, up
0.8% on last season.
Calving is finishing up in
most regions with cow
condition remaining positive
leading into mating.
Pasture conditions have been
reported to be generally
good with minimal impact
from recent cold weather.
%

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



,
,
,
.
.
. 
.

. 
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 decline in New Zealand’s
economic outlook helped
fuel expectations for
additional interest rate cuts
by the RBNZ, this, together
with rising geopolitical
tensions, resulted in the NZD
weakening across September.
Fonterra GDT results at
last trading event
15 October 2019:
The next trading event will be held on 5 November 2019. Visit www.globaldairytrade.info for more information.
Change in Fonterra’s
weighted average product
price from previous event
0.5
Fonterra’s weighted
average product price

(USD/MT)
3,353
USD
Fonterra product quantity
sold on GDT
000’ MT
38.0
NORTH ASIA (INCLUDING CHINA)
SOUTH EAST ASIA
MIDDLE EAST AND AFRICA
LATIN AMERICA
OTHER
USD 3,636/MT
2.2
CHEDDAR
USD 2,753/MT
2.5
SMP
USD 3,133/MT
0.3
WMP
USD 5,065/MT
1.3
AMF
USD 4,105/MT
0.5
BUTTER
USD 6,916/MT
3.5
RENNET CASEIN
38,030
MT
LATEST AUCTION
217,415
MT
FINANCIAL
YEAR‑TO‑DATE

7
Our Performance
India’s foodservice
sector has a new
partner in Anchor™
Food Professionals
Chefs in India’s
rapidly-growing foodservice
sector are the latest to
benefit from Fonterra’s
foodservice offering,
following the launch of
Anchor™ Food Professionals
at the SIAL food innovation
exhibition held in New Delhi.
The launch demonstrates
the Co-op's new strategy
in action as it develops
partnerships and new
foodservice markets.
Fonterra Chief Executive
Officer for Asia Pacific
Judith Swales explains that as
the world’s largest producer
and consumer of dairy,
India’s appetite for dairy is
significant and shows no
signs of slowing.
Over the next seven years,
demand for dairy from Indian
consumers is set to increase
by 82 billion litres – seven
times the forecast growth for
China. The country’s young
population is looking to level
up its dairy consumption
with new products that meet
their expectations of higher
quality and better nutrition.
The Co-op’s dairy
heritage coupled with
uncompromising food safety
and quality standards are a
strong draw for consumers in
the Indian market.
However, Judith explains that
understanding the nuances
of this dynamic market will
be key to making an impact
in India.
“We recognise that our
expertise in dairy is just one
part of the equation in the
Indian market. If we want to
make a difference, we can’t
go it alone. In this diverse
market, it’s essential to find
the right partners with the
market knowledge, industry
expertise and infrastructure
to reach our consumers.
“That’s why we’ve chosen
to partner with Future
Consumer. Through our joint
venture, Fonterra Future
Dairy, launched in August
2018, we are taking a truly
collaborative approach to
bring new generation of
dairy products to this rapidly
expanding market.”
With the launch of Anchor™
Food Professionals in
India, the Co-op aims to
enable chefs in the Indian
foodservice sector to create
food that not only tastes
and looks better but helps
them to run a more efficient
kitchen with better yield
and less wastage, giving
them the edge in the
foodservice industry.
The Indian foodservice
sector is set to grow at 9%
each year until 2023, when it
is predicted to reach a total
value of over NZ$130 billion.
Dairy is estimated to feature
in 10% of food served in
restaurants, making it an
essential component in the
food landscape.
The first products in the
range – Extra Whip Whipping
Cream, Laminated Butter
Sheets, Extra Stretch
Mozzarella Cheese and
Traditional Style Cream
Cheese, are made in
New Zealand and are
available now.
The launch of the
foodservice product range
follows the launch of four
consumer products from
Fonterra Future Dairy’s
consumer brand Dreamery in
June this year.
The Dreamery Dahi (curd),
UHT Toned Milk, Chocolate
and Strawberry Milkshakes
are currently available at over
1,100 Future Group Modern
Trade stores across India, as
well as 500 general trade
stores in key cities including
Mumbai, Pune, Bangalore,
Ahmedabad and Hyderabad.
The response so far has been
positive, with Dreamery’s
Milk Shakes and UHT
Toned Milk achieving more
than 10% of sales in their
respective categories in
Future Retail Stores.
Future Consumer’s
parent company Future
Group is present in 26 of
31 Indian states with over
2,000 modern trade
outlets and 5,000 public
distribution outlets, as
well as a nationwide
cold-chain and ambient
distribution network.

Fonterra GoodSorts
taking GoodYarn to the
next level
“GoodYarn is a story of
helping everyday people talk
about mental health,” says
Terry Buckingham, Fonterra
Health and Wellbeing
Manager, New Zealand.
“Recently, our team of tanker
operators asked if we had
any tools to help them talk
about mental health and
help others.”
“Kiwi men are often the first
to help someone, however
they’re often the last to ask
for help for themselves.
When I went looking for
some tools it started a
special relationship with the
GoodYarn team, which lead
to GoodYarn workshops
being delivered across
our operations.
GoodYarn is a peer delivery
programme, which was
initially formed as a
programme that could be
delivered by farmers for
farmers. It's the peer delivery
model that has been the key
to the success of GoodYarn.
There is a growing realisation
amongst experts that peer
delivery is as effective, if not
more effective, than expert
led mental health promotion.
Following on from the first
successful year of GoodYarn
workshops, the Farm Source
team delivered it to their
technical sales reps.
Distribution centre teams
also rolled it out last year and
now at our Fanshawe Street
office the Health, Safety and
Wellbeing Committee have
taken GoodYarn to the next
level by adding GoodSorts.
GoodSorts is a group
of volunteers who are
recognized as a champion of
mental health awareness and
have the same or similar skill
set to Mental Health First
Aiders – with the addition
of delivering GoodYarn
workshops.
Our Co-op
7
Fonterra is pleased
to announce the
appointment of
Fraser Whineray to its
management team in
the newly created role
of Chief Operating
Officer, starting in
early 2020
Mr Whineray is currently the
Chief Executive of Mercury
NZ and has held several
senior leadership roles since
joining the company in 2008.
Fonterra CEO Miles Hurrell
says Mr Whineray is
a results-orientated
New Zealand business leader.
“Fraser has demonstrated he
can transform organisations
to achieve growth in
complex environments
through a focus on
innovation, customers and
his team. He is motivated to
contribute to New Zealand’s
export success and to drive
sustainability, innovation and
efficiency in business – three
strengths that we believe can
create real value.
Fraser is also no stranger to
the dairy industry, having
started his career as a
graduate of the New Zealand
Dairy Board’s technical
training programme and
spending time at some of
our manufacturing sites and
in our export markets. He is
going to be a great addition
to our management team”.
Mr Whineray says he is
looking forward to returning
to the dairy sector and
working alongside the many
dedicated people at Fonterra.
“I am pleased to be able to
continue in a role which
contributes to New Zealand,
and has strong, genuine
relationships with many
regional communities, Maori
land trusts and local iwi
across the country”.
Mr Whineray has held
roles at Credit Suisse,
Puhoi Valley Cheese and
Carter Holt Harvey.
He is the Chair of the
Prime Minister’s Business
Advisory Council and
holds an MBA from the
University of Cambridge, a
Post Graduate Diploma in
Dairy Science & Technology
from Massey University and
a Bachelor of Chemical &
Process Engineering from the
University of Canterbury.

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 August; New Zealand and US to September.
NOTE: Data for EU to July; New Zealand, Australia and US to August.
NOTE: Data for Latin America, Asia, Middle East & Africa to July; China to August.
SOURCE: Government milk production statistics/GTIS trade data/Fonterra analysis.

WEIGHTED AVERAGE PRICEQUANTITY SOLD
APR 
MAR 
DEC OCT 
JAN 
JUL 
AUG 
MAY 
SEP 
FEB 
NOV 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)
SEPTEMBER
2019
SEPTEMBER

2018
MONTHLY
CHANGE
SEASON-
TO-DATE
2019/20
SEASON-
TO-DATE
2018/19
SEASON-
TO-DATE
CHANGE
Total Fonterra
New Zealand
179.1179.3(0.1%)309.4307.00.8%
North Island112.1110.91.1%210.9207.41.7%
South Island66.968.4(2.1%)98.599.6(1.1%)
Fonterra Australia10.712.7(15.5%)23.229.8(22.1%)
Fonterra GDT results
This table provides more
information on the latest
results, including a snapshot
of the year-to-date results.
LAST TRADING EVENT
(15 OCTOBER 2019)
YEAR-TO-DATE

(FROM 1 AUGUST 2019)
Quantity Sold on GDT
(Winning MT)
38,030217,415
Change in Quantity Sold on GDT
over same period last year
(7.8%)(2.7%)
Weighted Average Product Price
(USD/MT)
3,3533,310
Change in Weighted Average
Product Price over same period
last year
15.3%10.4%
Change in Weighted Average
Product Price from previous event
0.5%–
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.
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