Global Dairy Update June 2020

•Home shopping promotion nets big gains in South Korea.
1
Global Dairy
UPDATE
• New Zealand ends
season with increased
monthly production. Australia's recent
production improvement continues. EU
production growth slows and US declines.
•New Zealand monthly exports decline and
Australia exports soften. Monthly increase
from US and EU.
•Latin America, Asia and Middle East and Africa
imports have strong decline. China monthly
imports soften.
•Fonterra’s New Zealand milk collection for the
season ended 31 May 2020 was 1,517 million
kgMS, down 0.4% on prior season.
•
F
onterra Australia milk collection decreased
12.4% to 101 million kgMS for the season to
31 May 2020.
•
Dr Jeremy Hill awarded Queen’s Birthday honours.
Key Dates
31 July 2020
End of Financial Year 2020
September 2020
FY20 Annual Results
Announcement
20 April 2021
Compliance Date for
2020/21 Season
JUNE 2020

%
%
%%
%
%
%%
Change for May 2020
compared to May 2019
Change for May 2020
compared to May 2019
Change for April 2020
compared to April 2019
Change for April 2020
compared to April 2019
Change for the 12 months
to May 2020
Change for the 12 months
to May 2020
Change for the 12 months
to April 2020
Change for the 12 months
to April 2020
1.16.44.3
2.30.91.2
0.2
0.4
2
OUR MARKETS
Global Production
New Zealand ends season
with increased monthly
production. Australia's
recent production
improvement continues. EU
production growth slows
and US declines
New Zealand milk
production¹ increased 4.3%
on a litres basis (up 3.8%
on milk solids basis) in May
compared to May last year.
Following months of drought
and lower milk production,
May production improved on
the back of more favourable
weather conditions.
Full season New Zealand
milk production for the 12
months to May was 0.4%
lower than last year.
Fonterra collections are
reported for May, see page 5
for details.
Australia milk
production increased 6.4%
in April compared to April
last year.
Better seasonal conditions and
improved farmer confidence
contributed to the continuing
production recovery in the
second part of the season,
especially in Victoria
and Tasmania.
Production for the 12 months
to April was down 2.3 % on the
previous 12 months.
Dairy Australia has moderated
its outlook for 2019–20
production upwards, to a drop
of just 1-3% on last year.
Fonterra collections in
Australia are reported for May,
see page 5 for details.
EU (including UK) milk
production increased by
0.2% in April compared to
the same period last year.
The main production
regions showed slower
growth. Increases can be
seen in Ireland (up 3.5%),
Spain (2.3%) and the
Netherlands (1.7%), but
largely offset by a sharp drop
in Italy (down 2.1%) and the
UK (1.6%).
EU milk production for the
12 months to April was up by
0.9% compared to the same
period last year.
US milk production
decreased by 1.1% in May,
compared to the same
period last year.
US milk production declined
year-on-year for the month
of May, as production
restriction programmes were
put in place. Reduced rations,
lower frequency of milking
and, to a lesser extent, cow
culling were observed to
reduce output.
Milk production for the 12
months to May was 1.2%
higher compared to the
same period last year.
NEW ZEALANDAUSTRALIAEUROPEAN UNION/UKUSA
To view a chart that
illustrates year-on-year
changes in production –
1 New Zealand production is measured in litres.
Note: 2020 production numbers include one extra day of production in February as 2020 is a leap year.

To view a chart that
illustrates year-on-year
changes in exports –
3
OUR MARKETS
Global Exports
New Zealand monthly
exports decline and
Australia exports soften.
Monthly increase from US
and EU
Total New Zealand
dairy exports decreased
by 4.4%, or 13,444  MT,
in April compared to the
same period last year, albeit
to a lesser extent than
last month.
This was primarily driven
by decreased demand for
cheese (down 6,288 MT) to
China and Japan, butter to
Egypt and Australia (down
4,196 MT) and fluid milk
products to Taiwan and the
Philippines (down 2,890 MT).
Exports for the 12 months to
April were down by 1.0%, or
34,427 MT, on the previous
comparable period. This was
primarily driven by butter
and AMF.
EU (including UK) dairy
exports increased by
2.3%, or 11,667 MT, in March
compared to the same
period last year. This was
mainly driven by increased
whey to China, butter and
cheese to the US, up a
combined 29,317 MT, and
partially offset by a decrease
in SMP exports to China,
Egypt and Asia of 24,496  MT.
Exports for the 12 months
to March were up 5.8%, or
317,396 MT, on the previous
comparable period. Fluid
milk products, butter and
cheese were the main
drivers of this growth, up a
combined 248,922  MT.
US dairy exports
increased 7.1%, or 13,584  MT,
in April compared to the
same period last year,
bouncing back from the past
two months.
Exports increased to South
East Asia and China offsetting
a drop in exports to Mexico on
the back of a lower peso and
weaker Mexican economy.
The increase was driven by
S M P, WPC and lactose, up a
combined 17,410 MT, partially
offset by lower exports of
cheese, down 6,157  MT.
Exports for the 12 months to
April 2020 were up 2.1%, or
48,569 MT on the previous
comparable period driven by
SMP, WPC and lactose, up
a combined 95,297 MT and
partially offset by decreases in
whey, down 40,451  MT.
Australia dairy exports
increased by 1.9%, or
1,244 MT, in April compared
to the same period last year.
This was primarily driven by
fluid milk products and SMP,
up a combined 4,311  MT,
but partially offset by lower
demand for cheese, down
1,807  MT.
Exports for the 12 months
to April were down 7.1%, or
55,677 MT, on the previous
comparable period.
Declines were recorded
across a broad range of
products with SMP, infant
formula, whey, cheese, butter
and WMP down 81,330 MT
and partially offset by fluid
milk products, up 29,922  MT.
NEW ZEALANDAUSTRALIAEUROPEAN UNION/UKUSA
%
%
%%
%
%
%%
Change for April 2020
compared to April 2019
Change for April 2020
compared to April 2019
Change for April 2020
compared to April 2019
Change for March 2020
compared to March 2019
Change for the 12 months
to April 2020
Change for the 12 months
to April 2020
Change for the 12 months
to April 2020
Change for the 12 months
to March 2020
7.11.94.4
7.15.82.1
2.3
1.0

To view a chart that
illustrates year-on-year
changes in imports –
4
OUR MARKETS
Global Imports
Latin America, Asia and
Middle East and Africa
imports have strong
decline. China monthly
imports soften
Latin America dairy
import volumes¹ decreased
10.9%, or 18,209 MT, in March
compared to the same period
last year. This was driven by
continued lower demand for
SMP from Mexico, and for
WMP from Cuba, Brazil and
El Salvador, down a combined
17,287  MT.
Imports for the 12 months
to March 2020 were
down 2.8%, or 54,407  MT,
compared to the same period
the previous year.
Decreases were driven
primarily by WMP, infant
formula, whey and SMP, down
a combined 81,415 MT but
largely offset by increases in
WPC, up 18,957  MT.
Asia (excluding China)
dairy import volumes¹
decreased 11. 2% or 51,626  MT,
in March compared to March
last year. Decreases were
recorded primarily in SMP
to the Philippines, Pakistan
and Bangladesh, fluid milk
products to the Philippines
and WMP to Sri Lanka and
Hong Kong, down a combined
48,031  MT.
Imports for the 12 months to
March were down 2.9%, or
139,989 MT, compared to the
same period the previous year.
Decreases were recorded
across SMP, WMP, fluid
products and whey, down a
combined 149,494 MT, offset
by increased cheese and
lactose, up 29,155  MT.
Middle East and Africa
dairy import volumes¹
decreased 11. 7%, or
46,431 MT, in March 2020
compared to the same
period last year. Decreases
were recorded principally in
fluid milk product to Libya,
infant formula to Nigeria
and butter to Turkey, down a
combined 44,422  MT.
Imports for the 12 months
to March 2020 were
down 3.5%, or 143,989  MT,
compared to the same
period last year. This was
driven by large decreases
in fluid milk products and
WMP, down a combined
154,634  MT.
China dairy import
volumes increased by
2.1%, or 5,584 MT, in April
compared to the same
period last year. The sharp
increase in year-on-year
imports seen in March
has eased.
The increase was the result
of higher volumes of WMP,
whey, and infant formula, up
a combined 20,060 MT, and
partially offset by a decrease
in fluid milk products of
11, 307  MT.
Imports for the 12 months to
April were up 5.6%, driven by
fluid milk products and WMP.
LATIN AMERICAASIAMIDDLE EAST & AFRICACHINA
1 Estimates are included for those countries that have not reported data.
%
%
%%%
%%
Change for March 2020
compared to March 2019
Change for April 2020
compared to April 2019
Change for March 2020
compared to March 2019
Change for March 2020
compared to March 2019
Change for the 12 months
to March 2020
Change for the 12 months
to March 2020
Change for the 12 months
to March 2020
2.1
11.210.9
2.93.5
%
Change for the 12 months
to April 2020
5.6
11.7
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 May
For the 2019/20 Season
compared to the previous season
For the 2019/20 Season
compared to the previous season
For the 2019/20 Season
compared to the previous season
Change for May 2020
compared to May 2019
Change for May 2020
compared to May 2019
Change for May 2020
compared to May 2019
Change for May 2020
compared to May 2019
5.36.93.52.1
12.42.12.10.4
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 May was
7.7 million kgMS, a 5.3%
decrease on May last year. For
the month, farm milk collection
was up on last year, while
third-party milk was down.
Season-to-date collection
reached 100.9 million kgMS,
down 12.4% on the same
period last season. Fonterra
milk collections have been
impacted by the highly
competitive milk supply market
which has seen losses primarily
to milk brokers. Fonterra
Australia has also made a
conscious decision to purchase
less third-party milk to focus on
a value-add product mix.
North Island milk collection
partially recovered in May
relative to past months as
weather conditions became
more favourable and drought
conditions eased, ending at
30 million kgMS, down 3.5%
on last May.
Full season collection for the
North Island was 874.6 million
kgMS, down 2.1% on
last season.
South Island milk collection
in May was 39.9 million kgMS,
up 6.9% on last May, with
good conditions through
much of the month.
Full season collection for the
South Island was 642.5 million
kgMS, up 2.1% on last season.
Fonterra's New Zealand
collection for the 2019/20
season was 1,517 million kgMS,
down 0.4% on last season.
Fonterra's collection in May,
was 69.9 million kgMS, up
2.1% on the same month last
season. May brought rain
across the country, with some
of the heavier falls across
northern areas where it was
very dry.
Forecast milk collection
for the 2020/21 season is
1,525 million kgMS.
%

%%
%%%
To view more information,
including a snapshot of the
rolling year-to-date results –
%
6
GDT PRICE INDEXNZDUSD SPOT RATE
JUN JUN FEB JUN OCT FEB 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
Indicators of global and
domestic economic
activity started to show
improvement by late May,
and into June, as many
nations moved to relax
their COVID-19 lock-
down measures.
Financial markets were
encouraged that the worst
of the economic shock
may be behind us – the
New Zealand dollar peaked
above 65 US cents on this
more sanguine outlook.
Fonterra GDT results at
last trading event
16 June 2020:
The next trading event will be held on 7 July 2020. Visit www.globaldairytrade.info for more information.
Change in Fonterra’s
weighted average product
price from previous event
2.7
Fonterra’s weighted
average product price

(USD/MT)
3,009
USD
Fonterra product quantity
sold on GDT
000’ MT
20.7
NORTH ASIA (INCLUDING CHINA)
SOUTH EAST ASIA
MIDDLE EAST AND AFRICA
LATIN AMERICA
OTHER
USD 3,631/MT
3.1
CHEDDAR
USD 3,993/MT
0.8
AMF
USD 2,829/MT
2.5
WMP
USD 3,597/MT
0.9
BUTTER
USD 2,629/MT
3.9
SMP
20,686
MT
LATEST AUCTION
640,236
MT
FINANCIAL
YEAR‑TO‑DATE

7
Our Performance
Home Shopping
promotion nets big
gains in South Korea
A Daesang campaign
supported by Fonterra
Medical and Healthy Aging
Functional Nutrition Unit has
scored US$1 million in sales
in just 60 minutes on a home
shopping TV channel... and
there’s more to come.
50,000 cans sold out at a
rate of around US$17,000 a
minute and the TV session
broke a sales record.
The product is called Pasture
Raised/Grass fed Protein.
This was the first time
New Zealand provenance
was put on centre stage
on the prime time home
shopping channel (Lotte) and
three key value propositions
in Grass Fed, Made with
NZMP and Made with
NZ Dairy captured the
South Korean audience.
As a result of the successful
promotion our customer,
Daesang, will do more Home
Shopping segments and
increase their offline and
online channel presence.
Daesang is one of the
leading producers of dairy
nutrition products in
South Korea. They have
been happy to promote
our concept formulation
in their own Ready To Mix
powdered beverage.
A lot of people think
home shopping is really
old-fashioned, but in
countries like South Korea
it's still very popular. It's a
fast-moving platform, with
products ordered arriving
on the same day. With 87
reviews on the product, the
current rating is 97 out of
100 based on price, taste,
packaging and delivery.

Our Co-op
8
Dr Jeremy Hill awarded
Queen’s Birthday
honours
When Fonterra’s Chief
Science & Technology
Officer, Dr Jeremy Hill heard
he was being recognised
on the Queen’s Birthday
Honours list, he didn’t quite
believe it.
“It was a shock at first, it’s
not something you usually
consider. To be one of the
lucky few recognised is truly
an honour and my family
is very proud,” says Jeremy,
who has been made a
Member of the New Zealand
Order of Merit for services
to the dairy industry and
scientific research.
“It was a nice piece of news
to share with my parents
who live in the UK. It was
a real boost for them, and
Mum was especially chuffed.
I don’t think there is a
neighbour on her street that
she hasn’t already told!”
Starting his PHD in medical
research at Hull University in
the 1980s, Jeremy was keen
to travel and learn so he
jumped at the opportunity to
study at Massey University in
Palmerston North.
This role opened doors, but
it was only the start. He
was studying liver function
at the time, directly across
the road from the Dairy
Research Institute.
One morning over a cup of
tea, a director of the Dairy
Research Institute offered
Jeremy a job.
“I will never forget it,
someone said to me that
I should start turning
right instead of left in
the morning.
“I thought I would go over
for a couple of years... fast
forward and it's now been
over 30 years working
in dairy.”
That decision to turn right
and take on the research
role led Jeremy down a path
to being internationally
recognised for his work in
dairy science, sustainability
and nutrition.
In 2007, Jeremy was
appointed Fonterra’s Chief
Science and Technology
Officer, where he works
across process and product
development, food assurance
and regulatory, among
other areas.
“It has always been satisfying
to work on challenging
scientific problems that can
make a big difference to the
business and our customers.”
A highlight of his career
has been working with
universities, science and
government sectors,
including his involvement
in New Zealand’s single
biggest Research and
Development programme,
the Transformational
Dairy Platform – a joint
industry and Government
funded programme under
the Primary Growth
partnership that has helped
commercialise a significant
number of Fonterra’s leading
products and technologies.
He has also been the only
New Zealander to hold the
positions of President and
Chair of the International
Dairy Federation (IDF) in its
117-year history.
“I was very proud of my time
with IDF, from being made
an honouree life member
through to brokering the
FAO/Global Dairy Industry
Declaration of Rotterdam
in 2016.”
This was essentially a
blueprint for sustainable,
environmentally aware
future dairy production
and nutrition.
Appointed in 2018 as
the Adjunct Professor,
Sustainable Nutrition, Riddet
Institute, Massey University,
Jeremy is passionate about
dairy innovation.
“A real theme to my work is
researching the true facts.
From nutrition and the role
dairy plays, and how our
Co-operative is a leader in
this, through to helping with
our carbon footprint.”
Providing support and advice
over the years, he loves the
varied and fulfilling role he
has within the Co-op.
“I have the best job in our
Co-op, I really think I do,” but
he adds it would be nothing
without the support from his
family and the people that
have worked alongside him.
“It has been humbling to
receive well wishes, from
people in the government
and ag sector, as well my
colleagues within the Co-op.
“I’ve come to reflect on the
connections I have made
here in New Zealand and
across the globe. I’ve been
fortunate to work alongside
talented people.”
Jeremy is excited to continue
contributing to dairy
innovation and the scientific
research that really matters
and is still publishing two to
three pieces a year.

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
SEP AUG JUN MAY FEB MAR APR NOV JAN DEC JUL OCT 
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 April; New Zealand and US to May.
NOTE: Data for EU to March; New Zealand, Australia and US to April.
NOTE: Data for Asia, Latin America and Middle East & Africa to March; China to April.
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)
M AY
2020
M AY

2019
MONTHLY
CHANGE
SEASON-
TO-DATE
2019/20
SEASON-
TO-DATE
2018/19
SEASON-
TO-DATE
CHANGE
Total Fonterra
New Zealand
69.968.42.1%1,517.11,522.7(0.4%)
North Island30.031. 1(3.5%)874.6893.3(2.1%)
South Island39.937.36.9%642.5629.52.1%
Fonterra Australia7.78.25.3%100.9115.2(12.4%)
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 JUNE 2020)
YEAR-TO-DATE

(FROM 1 AUGUST 2019)
Quantity Sold on GDT
(Winning MT)
20,686640,236
Change in Quantity Sold on GDT
over same period last year
(12.5%)1.9%
Weighted Average Product Price
(USD/MT)
3,0093,271
Change in Weighted Average
Product Price over same period
last year
(8.3%)5.9%
Change in Weighted Average
Product Price from previous event
2.7%–
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