Global Dairy Update February 2020

• Fonterra completes the sale of DFE Pharma.
1
Global Dairy
UPDATE
• Monthly production in New Zealand down.
EU and US in line with expectations.
• Monthly exports from the US show strong
growth. New Zealand, Australia and EU
monthly exports decline.
• December imports into China continued to
grow. Latin America, Asia and Middle East &
Africa monthly imports down in November.
• Fonterra’s Te Awamutu site moves to pellet.
Key Dates
29 February 2020
Final Date for Applications to
Supply Fonterra
18 March 2020
FY20 Interim Results
Announcement
20 April 2020
Share Standard Compliance
2019/20 Season
May 2020
FY20 Q3 Business Update
FEBRUARY 2020
• Fonterra’s milk collection across New Zealand
for the eight months to 31 January reached
1,079 million kgMS, down 0.3% on last
season. Australian milk collection for the
season to 31 January decreased 16.0% to
69.7 million kgMS.
• Fonterra has updated its forecast milk collection
for the full season to 1,515 million kgMS.

%
%
%%
%
%
%%
Change for January 2020
compared to January 2019
Change for January 2020
compared to January 2019
Change for December 2019
compared to December 2018
Change for December 2019
compared to December 2018
Change for the 12 months
to January2020
Change for the 12 months
to January 2020
Change for the 12 months
to December 2019
Change for the 12 months
to December 2019
0.90.00.7
6.30.40.4
1.1
1.6
2
OUR MARKETS
Global Production
Monthly production in
New Zealand down.
EU and US in line with
expectations
New Zealand milk
production¹ was down 0.7%
on a litre basis in January (up
1.1% on a milk solids basis)
compared to the same period
in the prior year.
A combination of dry
conditions across the
North Island and heavy rain
at the bottom of the South
Island adversely affected milk
production in January.
New Zealand milk production
for the 12 months to January
was 1.6% lower than last year.
Fonterra collections are
reported for January, see page
5 for details.
Australia milk
production was stable in
December compared to the
same period in the prior year.
Production for the 12 months
to December was down 6.3%
on the previous 12 months.
Dairy Australia has
reaffirmed its full season
production forecast to
decline by 3% to 5%.
Fonterra collections in
Australia are reported
for January, see page 5
for details.
EU milk production
increased by 1.1% in
December compared to the
same period last year.
Production growth can
be seen from key milk
producing countries such as
Germany (1.1%), France (1.1%)
the Netherlands (2.8%) and
Poland (1.8%).
EU milk production for the
12 months to December was
up by 0.4% compared to the
same period last year.
US milk production²
increased by 0.9% in January,
compared to the same
period last year.
January milk production
continued to grow, driven
by a large increase in herd
sizes and greater milk yield
per cow.
Milk production for the 12
months to January 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 production –
1 New Zealand production is measured in litres.
2 US milk production is reviewed by USDA at the end of each month/quarter and annually in February and therefore is subject to change..

To view a chart that
illustrates year-on-year
changes in exports –
3
OUR MARKETS
Global Exports
Monthly exports from the
US show strong growth.
New Zealand, Australia and
EU monthly exports decline
Total New Zealand
dairy exports decreased
by 1.9%, or 8,235 MT, in
December compared to
the same period last year.
This was primarily driven
by WMP, SMP and infant
formula, down a combined
14,314 MT, and partly offset
by an increase in butter, up
10,590  MT.
Exports for the 12 months to
December were up 8.3%, or
271,761 MT, on the previous
comparable period. This was
primarily driven by WMP,
fluid milk products, infant
formula and SMP, up a
combined 256,551  MT.
EU dairy exports
decreased 2.5%, or 11,345  MT,
in November compared to
the same period last year.
This was mainly driven
by decreases in fluid milk
products and SMP, down
a combined 17,687 MT and
partially offset by an increase
in butter exports of 7,661  MT.
Exports for the 12 months to
November were up 7.7%, or
410,147 MT, on the previous
comparable period. SMP,
fluid milk products, butter,
cheese and lactose were the
main drivers of this growth,
up a combined 425,887  MT.
US dairy exports
increased 16.8%, or
28,404 MT, in December
compared to the same
period last year, marking the
third consecutive month of
export growth. The increase
was driven primarily by SMP,
up 18,880 MT in addition
to WPC and WMP, up a
combined 9,991 MT. The
decline in whey exports of
prior months has stabilised.
Exports for the 12 months to
December 2019 were down
5.1%, or 123,882 MT, on the
previous comparable period.
The decrease was driven
by whey, WPC, lactose and
AMF, down a combined
126,474  MT.
Australia dairy exports
decreased 9.5%, or 6,873  MT,
in December compared to
the same period last year.
This was primarily driven
by SMP, infant formula and
cheese, down a combined
6,505  MT.
Exports for the 12 months to
December were down 2.2%,
or 16,635 MT, on the previous
comparable period.
Declines were recorded
across a broad range of
products with SMP, WMP,
cheese and whey, down
60,282 MT but partially
offset by sustained increases
in fluid milk products, up
42,158  MT.
NEW ZEALANDAUSTRALIAEUROPEAN UNIONUSA
%
%
%%
%
%
%%
Change for December 2019
compared to December 2018
Change for December 2019
compared to December 2018
Change for December 2019
compared to December 2018
Change for November 2019
compared to November 2018
Change for the 12 months
to December 2019
Change for the 12 months
to December 2019
Change for the 12 months
to December 2019
Change for the 12 months
to November 2019
16.89.51.9
2.27.75.1
2.5
8.3

To view a chart that
illustrates year-on-year
changes in imports –
4
OUR MARKETS
Global Imports
December imports into
China continued to grow.
Latin America, Asia and
Middle East & Africa
monthly imports down
in November
Latin America dairy
import volumes¹
decreased 11. 6%, or
19,336 MT, in November
compared to the same period
last year. This was driven
by decreases in SMP, infant
formula, WMP and AMF,
down a combined 19,461  MT.
Imports for the 12 months
to November 2019 were up
0.3%, or 5,863 MT, compared
to the same period the
previous year. Increases were
driven primarily by fluid milk
products, WPC and SMP, up
by a combined 55,483 MT and
largely offset by decreases
in whey, infant formula and
cultured products, down a
combined 52,474  MT.
Asia (excluding China)
dairy import volumes¹
decreased 0.7%, or 2,860  MT,
in November compared to
the same period last year.
Decreases were recorded
in WMP and fluid products,
down 15, 685 MT, partially
offset by an increase in SMP
and ice cream imports, up a
combined 7,948  MT.
Imports for the 12 months
to November were up 2.7%,
or 129,724 MT, compared to
the same period the previous
year. Growth was recorded
across SMP, fluid milk
products, cheese and butter,
up a combined 131,279  MT.
Middle East and Africa
dairy import volumes¹
decreased 3.6%, or 12,409  MT,
in November compared to
November 2018. Decreases
were recorded principally in
fluid milk products and WMP,
down a combined 22,396  MT.
This was partially offset by an
increase in SMP, whey and
infant formula, up a combined
10,624  MT.
Imports for the 12 months to
November 2019 were down
3.2%, or 133,762 MT, compared
to the same period last year.
This was driven by cheese,
WMP, butter and fluid milk
products, down a combined
200,812 MT, and partly offset
by a large increase in infant
formula of 110,259  MT.
China dairy import
volumes continued to
increase, up 13.8%, or
33,326 MT, in December
compared to the same
period last year. This is driven
primarily by increases in WMP
from New Zealand and SMP,
up a combined 32,220  MT.
Imports for the 12 months to
December were up 11.2%, or
318,219 MT, compared to the
same period last year.
Strong demand out of
China continued across all
key categories.
LATIN AMERICAASIAMIDDLE EAST & AFRICACHINA
1 Estimates are included for those countries that have not reported data.
%
%
%%%
%%%
Change for November 2019
compared to November 2018
Change for December 2019
compared to December 2018
Change for November 2019
compared to November 2018
Change for November 2019
compared to November 2018
Change for the 12 months
to November 2019
Change for the 12 months
to December 2019
Change for the 12 months
to November 2019
Change for the 12 months
to November 2019
13.80.711.6
2.73.211.2
3.6
0.3
The outbreak of the
COVID-19 coronavirus
will potentially impact
import numbers after
December 2019.

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 January
Season to date
1 June to 31 January
Season to date
1 June to 31 January
Season to date
1 June to 31 January
Change for January 2020
compared to January 2019
Change for January 2020
compared to January 2020
Change for January 2020
compared to January 2019
Change for January 2020
compared to January 2019
13.54.32.30.5
16.00.30.70.3
VOLUME M LITRESDAY
JUNJULAUGSEPOCTNOVDECJANFEBMARAPRMAY









5
OUR MARKETS
Fonterra Milk Collection 2019/20 Season
NEW ZEALANDNORTH ISLANDSOUTH ISLANDAUSTRALIA
New Zealand Milk Collection
Fonterra's Australia
collection in January was
9.2 million kgMS, down
13.5% on January last season.
Season-to-date collection
reached 69.7 million kgMS,
down 16.0% on last season.
Fonterra milk collections
continue to be impacted
by challenging on-farm
conditions and a highly
competitive milk supply
market which has seen losses
primarily to milk brokers.
North Island milk
collection in January was
96 million kgMS, down 2.3%
on last January.
Season to date collection
was 660.2 million kgMS,
down 0.7% on last season.
Continued dry weather
throughout January has
impacted pasture growth
rates, however this is
being partially offset by
supplementary feed.
South Island milk
collection in January was
73.8 million kgMS, up 4.3%
on last January.
Season to date collection
was 418.8 million kgMS, up
0.3% on last season.
Favourable weather
conditions across Canterbury
have continued, resulting
in good pasture growth and
strong milk production.
Fonterra's New Zealand
collection for January, was
169.8 million kgMS, 0.5%
ahead of the same month
last season.
Season-to-date collection
was 1,079 million kgMS,
down 0.3% on last season.
The impact of heavy rain
and flooding across parts
of the lower South Island
in early February and the
recent drought declaration
in Northland is still
being assessed.
%
Forecast milk collection for the
2019/20 season
1, 5 15M
kgMS
Forecast Fonterra
Milk Collection
Across New Zealand
Fonterra has updated its forecast milk collection to 1,515 million
kgMS for the 2019/20 season.
Fonterra’s New Zealand milk collection forecast is 1% lower
than our previous forecast of 1,530 million kgMS due to
ongoing challenging weather conditions across several parts of
New Zealand.

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



,
,
,
.

.

.
.

.

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 dollar began 2020 with a
period of inactivity however,
as the month progressed
geopolitical concerns
surrounding US-Iran tensions,
and the developing COVID-19
epidemic, pushed the dollar
lower to end the month near
64.5 US cents.
Fonterra GDT results at
last trading event
18 February2020:
The next trading event will be held on 3 March 2020. Visit www.globaldairytrade.info for more information.
Change in Fonterra’s
weighted average product
price from previous event
2.0
Fonterra’s weighted
average product price

(USD/MT)
3,203
USD
Fonterra product quantity
sold on GDT
000’ MT
27.4
NORTH ASIA (INCLUDING CHINA)
SOUTH EAST ASIA
MIDDLE EAST AND AFRICA
LATIN AMERICA
OTHER
USD 4,090/MT
3.9
BUTTER
USD 9,873/MT
0.8
RENNET CASEIN
USD 2,854/MT
2.4
SMP
USD 2,966/MT
2.4
WMP
USD 4,379/MT
3.6
AMF
USD 4,526/MT
5.2
CHEDDAR
27,391
MT
LATEST AUCTION
480,510
MT
FINANCIAL
YEAR‑TO‑DATE

7
Our Performance
Fonterra completes the
sale of DFE Pharma
Fonterra has announced
that it has completed
the sale of its 50% share
of DFE Pharma to CVC
Strategic Opportunities II.
As previously announced
in September 2019,
this sale was subject to
regulatory approvals from
competition authorities
and these have now all
been received.
Fonterra CFO,
Marc Rivers, says the
completion of this
sale is a key milestone
in strengthening the
Co-op’s balance sheet,
with cash proceeds of
$554 million, comprising
of the original sale
proceeds of $537 million
plus $17 million in
settlement adjustments.”
Fonterra has also entered
into a long-term supply
agreement with DFE
Pharma which will see it
continue to supply lactose
from its Kapuni site.
In March 2019, Fonterra
advised it was reviewing
its share of DFE Pharma,
a 50 per cent joint
venture with Royal
Friesland Campina.
DFE Pharma was
identified as part of a full
portfolio review being
undertaken by Fonterra
to re-evaluate every
investment, major asset
and partnership, to ensure
they were still right for
the Co-op.
While DFE Pharma
is performing well,
it needed significant
capital investment for
future growth.
In addition, Fonterra
believes DFE’s future
growth will be increasingly
outside of lactose-based
excipients and, as a
result, over time DFE will
become even less core to
the Co-op’s business
ASK AN EXPERT
dfepharma.com/productfinder

Oral Solid Dose
Primellose
®
Primellose
®
is DFE Pharma’s product brand name for Croscarmellose
Sodium. It is made in a dedicated pharmaceutical plant in Foxhol,
The Netherlands. Primellose
®
croscarmellose sodium is suitable for a
variety of tablet and capsule formulations. Primellose
®
is effective in
combination with both insoluble filler-binders and slightly soluble to
soluble filler-binders at concentrations of 2%w/w - 6%w/w. It is also a
choice for formulations which require non-starch products. Primellose
®

is effective when used intragranular and/or extragranular in granular
formulations.
In pursuit of excipient excellence
WE
WORK
WITH
YOUR
PRODUCT
IN MIND
WE
WORK
WITH
YOUR
PRODUCT
IN MIND

Our Co-op
8
Fonterra's Te Awamutu
site moves to pellet
power
Fonterra is taking another
step forward in its
commitment to renewable
energy as it announced that
its Te Awamutu site will be
coal free next season.
Until now the site has used
a combination of fuels to
process milk - including coal.
This latest move, follows a
trial last year and means it
will switch from using coal
at the end of this season,
starting the 2020/21 season
powering the boiler with
wood pellets.
Fonterra’s Sustainable
Energy and Utility
Manager Linda Thompson
says it’s an exciting step
for the Co-operative
and, in particular, the
Te Awamutu team.
“It really demonstrates that
sustainability, doing what’s
right for the long term good,
is very much at the heart
of how we’re working and
thinking about our future.”
Last year, Fonterra
announced a series of
environmental targets
relating to its coal use,
manufacturing emissions and
water efficiency, packaging
and farm environment plans.
“The move to wood pellets
at Te Awamutu will save
the Co-operative about
84,000 tonnes of carbon
emissions every year,
that’s the equivalent of
taking around 32,000 cars
off the road and will
reduce Fonterra’s national
coal consumption by
approximately 10 per cent.
“It’s a positive step forward
as we look to reduce
emissions and work towards
net zero carbon emissions
by 2050.”
The Te Awamutu site is one
of three North Island sites
that are currently using
coal. Ms Thompson says the
Co-operative knows it’s got
a big challenge ahead of it
to get out of coal but it’s one
that it’s up for.
“There is no one single
solution for us to transition
out of coal. We know we
can’t do it alone, that’s why
working with others like
wood pellet supplier Nature’s
Flame and the Energy
Efficiency and Conservation
Authority (EECA) are
so important.”
Taupo-based Nature’s Flame
will be supplying the pellets
made from sustainable
wood fibre residues from the
surrounding areas.
John Goodwin, Nature’s
Flame’s Operations Manager
says they’re excited to be
partnering with Fonterra.
“We’re encouraged about
the growth of the bioenergy
(wood pellets) industry and
we’re proud to be part of
something that’s good for
the environment and our
local communities.”
EECA’s Chief Executive
Andrew Caseley says
“this project fully aligns
with EECA’s purpose to
help decarbonise the
New Zealand economy.
“This is the largest boiler
conversion project to
biofuels to date, and this
is why it has received
$200,000 in funding
from EECA’s technology
demonstration programme.
It also has the added benefit
of establishing a more viable
and large scale wood pellet
supply chain.”
For a full run-down of
Fonterra's environmental
commitments and targets –

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

WEIGHTED AVERAGE PRICEQUANTITY SOLD
APR 
MAR 
JAN OCT 
FEB JUL 
AUG 
MAY 
SEP 
NOV 
DEC 
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)
JANUARY
2020
JANUARY

2019
MONTHLY
CHANGE
SEASON-
TO-DATE
2019/20
SEASON-
TO-DATE
2018/19
SEASON-
TO-DATE
CHANGE
Total Fonterra
New Zealand
169.8169.00.5%1,079.11,082.6(0.3%)
North Island96.098.3(2.3%)660.3664.8(0.7%)
South Island73.870.84.3%418.8417.80.3%
Fonterra Australia9.210.6(13.5%)69.783.0(16.0%)
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 FEBRUARY 2020)
YEAR-TO-DATE

(FROM 1 AUGUST 2019)
Quantity Sold on GDT
(Winning MT)
27,391480,510
Change in Quantity Sold on GDT
over same period last year
11. 1%0.0%
Weighted Average Product Price
(USD/MT)
3,2033,363
Change in Weighted Average
Product Price over same period
last year
(3.2%)12.8%
Change in Weighted Average
Product Price from previous event
(2.0%)–
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.
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