Global Dairy Update August 2020

• Teh-han Chow appointed as CEO, Greater China.
• Our Annual Results will be released on 18 September 2020.
1
Global Dairy
UPDATE
• A good start to the 2020/21 season in
New Zealand. Australia nears end of season
on improved monthly production. EU and US
production improves.
• New Zealand and Australia monthly exports
bounce back while EU export growth softens.
Strong increase in US exports.
• China monthly imports show strong increase.
Latin America, Asia and Middle East and Africa
imports continue to decline.
• Fonterra’s New Zealand milk collection for
the second month of the 2020/21 season was
19.1 million kgMS, up 4.1% on prior season.
• Fonterra's Australia milk collection for July,
the first month of the 2020/21 season, was
5.1 million kgMS.
• Kowbucha™ and seaweed: Fonterra’s innovation to
tackle methane.
Key Dates
18 September 2020
FY20 Annual Results
Announcement
5 November 2020
Fonterra Co-operative Group
Annual Meeting
20 April 2021
Compliance Date for
2020/21 Season
AUGUST 2020

%
%
%%
%
%
%%
Change for July 2020
compared to July 2019
Change for July 2020
compared to July 2019
Change for May 2020
compared to May 2019
Change for June 2020
compared to June 2019
Change for the 12 months
to July 2020
Change for the 12 months
to July 2020
Change for the 12 months
to May 2020
Change for the 12 months
to June 2020
1.56.04.6
1.10.91.4
0.9
0.5
2
OUR MARKETS
Global Production
A good start to the 2020/21
season in New Zealand.
Australia nears end of
season on improved
monthly production. EU and
US production improves
New Zealand milk
production¹ increased
4.6% on a litres basis in July
compared to July last year.
Mild conditions have been
favourable to the start of
the season’s production.
Winter milk is also
supporting production.
New Zealand milk
production for the 12 months
to July was 0.5% lower than
last year.
Fonterra collections are
reported for July, see page 5
for details.
Australia milk
production increased 6.0%
in May compared to May
last year.
Improving seasonal
conditions stabilised
production in the second
half of the 2019/20 season
and improved the outlook for
the 2020/21 season.
Production for the 12 months
to May was down 1.1% on the
previous 12 months.
No data is available yet for
June production.
Fonterra collections in
Australia are reported for July,
see page 5 for details.
EU (including UK) milk
production increased by
0.9% in June compared to
the same period last year.
The main regions showing an
increase in production were
Poland (up 4.6%), Ireland
(2.9%) and Belgium (3.9%).
These were partially offset
by continuing declines from
Italy, France and Spain.
EU milk production for the
12 months to June was up by
0.9% compared to the same
period last year.
US milk production
increased by 1.5% in July,
compared to the same
period last year.
Following the relaxing of
milk restrictions and cow
number increases, US milk
production improved year-
on-year in July, reversing a
three-month trend. Despite
the production growth in
July, uncertainty linked to the
Covid-19 pandemic remains
with the potential impact of
a second wave.
Milk production for the
12 months to July was 1.4%
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 and Australia
monthly exports bounce
back while EU export
growth softens. Strong
increase in US exports
Total New Zealand
dairy exports increased
by 9.0%, or 21,672 MT, in
June compared to the same
period last year.
This was primarily driven
by higher volumes of
WMP to the Middle East
(up 19,442 MT) and partly
attributable to timing as
May exports were down
7,000 MT. SMP exports
to South East Asia also
increased in June (up
3,444 MT) and were partially
offset by a decrease in
cheese (down 3,120 MT).
Exports for the 12 months to
June were down by 2.0%, or
70,887 MT, on the previous
comparable period. This was
primarily driven by butter,
AMF, cheese and WMP.
EU (including UK) dairy
exports increased 3.2%, or
15, 985 MT, in May compared
to the same period last year.
This was mainly driven by
increases in whey to China,
butter to the US and China,
lactose to China and Japan
and WMP to Algeria, up a
combined 30,737 MT and
partially offset by a decrease
in SMP and infant formula
exports of 16,697  MT.
Exports for the 12 months
to May were up 5.2%, or
289,693 MT, on the previous
comparable period. Butter,
cheese, fluid milk products
and whey were the main
drivers of this growth, up a
combined 263,759 MT. It was
partially offset by a decline in
SMP of 42,141  MT.
US dairy exports
increased 26.5%, or 48,414  MT,
in June compared to the same
period last year.
Strong June export volumes
were driven by record
shipments of SMP to South
East Asia, Egypt and China
(up 33,018 MT), and cheese to
Mexico (up 8,493 MT).
Exports for the 12 months to
June 2020 were up 7.7%, or
173,986 MT on the previous
comparable period, driven by
SMP, lactose, and WPC up a
combined 174,731  MT.
Australia dairy exports
bounced back from the
decline in May, increasing
by 14.8%, or 10,099 MT, in
June compared to the same
period last year.
This was primarily driven
by fluid milk products,
cheese, whey and SMP, up a
combined 10,099  MT.
Exports for the 12 months
to June were down 8.4%, or
66,348 MT, on the previous
comparable period.
Declines were recorded
across a broad range of
products with SMP, infant
formula, whey, WMP, cheese
and butter, down 77,362 MT
and partially offset by fluid
milk products, up 15,389  MT.
NEW ZEALANDAUSTRALIAEUROPEAN UNION/UKUSA
%
%
%%
%
%
%%
Change for June 2020
compared to June 2019
Change for June 2020
compared to June 2019
Change for June 2020
compared to June 2019
Change for May 2020
compared to May 2019
Change for the 12 months
to June 2020
Change for the 12 months
to June 2020
Change for the 12 months
to June 2020
Change for the 12 months
to May 2020
26.514.89.0
8.45.27.7
3.2
2.0

To view a chart that
illustrates year-on-year
changes in imports –
4
OUR MARKETS
Global Imports
China monthly imports
show strong increase.
Latin America, Asia and
Middle East and Africa
imports continue to decline
Latin America dairy
import volumes¹ decreased
19.9%, or 35,677 MT, in May
compared to the same period
last year. This was driven by
continued lower volumes of
SMP and cheese to Mexico
and Brazil, WMP to Brazil and
fluid milk products to Haiti,
down a combined 29,602  MT.
Imports for the 12 months to
May 2020 were down 4.5%,
or 88,928 MT, compared
to the same period the
previous year. Decreases
were driven primarily by
SMP, WMP, infant formula,
and whey, down a combined
93,511 MT, partially offset
by increases in WPC, up
15, 392  MT.
Asia (excluding China)
dairy import volumes¹
decreased 7.6%, or 33,514  MT,
in May compared to the same
period last year. Decreases
were recorded primarily
in fluid milk products to
Philippines, WMP and SMP
to South East Asia, and infant
formula to Malaysia, down a
combined 37,908  MT.
Imports for the 12 months
to May were down 4.9%, or
244,574 MT, compared to the
same period the previous year.
The main decreases were
recorded across SMP, WMP,
fluid products, down a
combined 246,577  MT.
Middle East and Africa
dairy import volumes¹
decreased 6.6% or 24,630 MT
in May 2020 compared to
the same period last year.
The main decreases were in
fluid milk product to Kenya
and Libya, infant formula to
Nigeria and butter to Iran
and Turkey, down a combined
48,077 MT, and partially offset
by increased volumes of SMP
of 18,231  MT.
Imports for the 12 months to
May 2020 were down 4.0%,
or 164,103 MT, compared
to May last year driven by
decreased imports of fluid
milk products, infant formula
and butter, down a combined
236,435 MT, offset by increases
in SMP.
China dairy import
volumes increased 21.4%,
or 48,373 MT, in June
compared to the same
period last year.
The increase was the result
of higher volumes in whey,
fluid milk products and
lactose, up a combined
48,452 MT. China’s imports
of whey last year were lower
due to the impact of African
Swine Flu.
Imports for the 12 months
to June were up 7.6%, driven
by fluid milk products, WMP
and whey.
LATIN AMERICAASIAMIDDLE EAST & AFRICACHINA
1 Estimates are included for those countries that have not reported data.
%
%
%%
%
%
%
Change for May 2020
compared to May 2019
Change for June 2020
compared to June 2019
Change for May 2020
compared to May 2019
Change for May 2020
compared to May 2019
Change for the 12 months
to May 2020
Change for the 12 months
to May 2020
Change for the 12 months
to May 2020
21.4
7.619.9
4.94.0
%
Change for the 12 months
to June 2020
7.6
6.6
4.5

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 July
Season to date
1 June to 31 July
Season to date
1 June to 31 July
Season to date
1 June to 31 July
Change for July 2020
compared to July 2019
Change for July 2020
compared to July 2019
Change for July 2020
compared to July 2019
Change for July 2020
compared to July 2019
6.53.54.24.1
6.511.32.03.5
VOLUME M LITRESDAY
JUNJULAUGSEPOCTNOVDECJANFEBMARAPRMAY










5
OUR MARKETS
Fonterra Milk Collection
NEW ZEALANDNORTH ISLANDSOUTH ISLANDAUSTRALIA
New Zealand Milk Collection
Fonterra's Australia
collection in July, the first
month of the 2020/21 season,
was 5.1 million kgMS, a 6.5%
decrease on July last year
largely due to a conscious
decision to reduce third-party
milk intake and focus on value.
July’s collection represents only
a small percentage of the new
season’s forecast collection.
The new mandatory Dairy Code
is active for the first time this
season and is to ensure security
over supply with all farmers
having to sign a contract for
the season.
North Island milk collection
in July was 17.1 million kgMS,
4.2% ahead of the same
month last season.
Season-to-date collection was
28 million kgMS, up 2.0% on
last season.
Pasture growth has been
reported as higher than
average, with the mild
conditions also limiting
pasture damage.
South Island milk collection
in July was 2.0 million kgMS,
3.5% ahead of the same
month last season.
Season-to-date collection was
5.8 million kgMS, up 11.3% on
last season.
Favourable weather has
resulted in good grass growth
contributing to animals'
good condition.
Fonterra's New Zealand
collection in July was
19.1 million kgMS, 4.1%
ahead of the same month
last season.
Season-to-date collection was
33.8 million kgMS, up 3.5% on
last season.
This represents only around
2% of the full season
forecast collection.
Mild weather across most
regions led to soil conditions
conducive to very good
pasture cover. As a result,
production is tracking higher
than for the same time
last season.
%
%

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



, 
,
.
.
.
.

.
PRICE INDEX
NZD  USD
OUR MARKETS
Fonterra Global Dairy Trade Results
Fonterra GDT sales
by destination:
Dairy commodity
prices and New
Zealand dollar trend
General US dollar weakness
saw the New Zealand dollar
peak at above 67 US cents
by the end of July. However,
continued accommodative
monetary policies from the
RBNZ tempered support for
the NZD and by late August
the exchange rate had settled
nearer 65 US cents.
Fonterra GDT results at
last trading event
18 August 2020:
The next trading event will be held on 1 September 2020. Visit www.globaldairytrade.info for more information.
Change in Fonterra’s
weighted average product
price from previous event
1.5
Fonterra’s weighted
average product price

(USD/MT)
3,020
USD
Fonterra product quantity
sold on GDT
000’ MT
30.8
NORTH ASIA (INCLUDING CHINA)
SOUTH EAST ASIA
MIDDLE EAST AND AFRICA
LATIN AMERICA
OTHER
USD 3,370/MT
2.0
BUTTER
USD 3,873/MT
3.0
AMF
USD 2,936/MT
2.2
WMP
USD 3,442/MT
3.5
CHEDDAR
USD 2,614/MT
1.0
SMP
30,806
MT
LATEST AUCTION
62,664
MT
FINANCIAL
YEAR‑TO‑DATE

7
Teh-han Chow
appointed as CEO,
Greater China
Fonterra has confirmed
the appointment of
Teh-han Chow to the role
of Chief Executive Officer,
Greater China.
Fonterra CEO Miles Hurrell
says since December
2019, Teh-han has been
at the helm in an acting
capacity, overseeing the
Co-op’s overall Greater
China business, including
Ingredients, Foodservice,
Consumer Brands and
China Farms.
“He’s made an impressive
contribution. It’s certainly not
been a steady-state. Teh-han
has been responsible for
implementation of our new
strategy across the Greater
China business, and over
the course of this calendar
year, has shown outstanding
resilience, resourcefulness
and empathy in getting his
team and our China business
through the ongoing
challenge of the COVID-19
global pandemic.
“Teh-han’s leadership
has helped keep us in
good shape during a
very challenging set of
circumstances, and I’m
delighted to welcome him
formally to the Fonterra
Management Team – it’s
well deserved”.
Teh-han has extensive
experience leading large
organisations in the food
sector, as well as proven
ability in business growth
through innovation and
putting customers front
and centre.
Previously, he headed up
Fonterra’s NZMP Ingredients
business for Greater China,
South & East Asia, where
he embedded sustained
improvements in business
performance, strong
customer relationships and
empowering leadership.
Before joining Fonterra in
2015, Teh-han was the CEO
of Louis Dreyfus in China,
a leading merchant and
processor of agricultural
goods. He was also
Managing Director Greater
China for Simplot, a food and
agribusiness company.
Teh-han has a Bachelor’s
degree in Marketing from
California State University
Northridge and a Master’s
degree, with honors, in
International Management
from Thunderbird
Graduate School of
International Management.
Teh-han Chow, Chief Executive
Officer, Greater China
Our Performance

Kowbucha™ and
seaweed: Fonterra’s
innovation to
tackle methane
It’s the million-dollar
question for New Zealand’s
largest industry: how can we
stop cows from burping?
Although cows in
New Zealand produce
only a tiny fraction of
global Greenhouse Gas
– at less than 0.04% –
solving this problem could
reduce New Zealand’s
carbon emissions by up to
20 per cent.
Scientists all around the
world are working on ideas
to reduce the methane
produced by livestock, and
Fonterra’s at the forefront of
that innovation in Aotearoa.
At Fonterra’s Palmerston
North Research and
Development Centre
(FRDC), we’re looking at the
potential of two exciting
new solutions. The details of
the research are kept very
much under wraps, because
we want New Zealand to
lead the way on this, but
without giving away too
many secrets, we’re looking
at natural ways to stop the
cow producing methane in
the first place.
Obviously, there are
sensitivities here in terms
of ensuring that we don’t
change the cow’s natural
biology and the milk it
produces. That’s 100 per cent
natural and we want to keep
it that way. And that’s where
Fonterra’s one-hundred
years of dairy fermentation
expertise comes in.
We have one of the world’s
largest dairy culture
collections to call on. We’re
using some of these cultures
to create new fermentations
we’re calling Kowbucha™,
which could potentially
switch off the bad bugs that
create the methane in cows.
It’s early days but initial
results with Kowbucha™
have been promising.
FRDC scientists are working
with AgResearch and the
Pastoral Greenhouse Gas
Research Consortium to
optimise Kowbucha™ to try
to create a cost effective
and practical solution to
reduce methane.
Another innovation
we’re working on is in
partnership with Australian
environmental company
Sea Forest, to see if using
seaweed in cows’ feed
can reduce greenhouse
gasses. The trial will use
Asparagopsis, a seaweed
grown naturally in Australia
and New Zealand, as a
supplement feed for Fonterra
herds in Tasmania during the
coming milk season.
In laboratory testing led by
Australia’s national science
research agency, CSIRO,
the seaweed has shown
the potential to reduce the
emissions from cows by
more than 80 per cent, so
we’re keen to see if those
test results can be replicated,
safely, in dairy herds at scale.
As a Co-operative owned
by 10,000 farmers, we
recognise reducing methane
gases is an important priority
and it’s exciting to see that
innovations Fonterra’s been
quietly working on are now
starting to bear fruit. And
while it’s still early in the
testing phase (good science
takes time), we’re proud to
be leading New Zealand’s
own solutions to the on-farm
methane problem.
Our Co-op
8

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 Australia to May; 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 Asia, Middle East & Africa and Latin America to May; China to June.
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)
J U LY
2020
J U LY

2019
MONTHLY
CHANGE
SEASON-
TO-DATE
2020/21
SEASON-
TO-DATE
2019/20
SEASON-
TO-DATE
CHANGE
Total Fonterra
New Zealand
19.118.34.1%33.832.73.5%
North Island17.116.44.2%28.127.52.0%
South Island2.01.93.5%5.85.211. 3%
Australia5.15.4(6.5%)5.15.4(6.5%)
Fonterra GDT results
This table provides more
information on the latest
results, including a snapshot
of the year-to-date results.
LAST TRADING EVENT
(18 AUGUST 2020)
YEAR-TO-DATE

(FROM 1 AUGUST 2020)
Quantity Sold on GDT
(Winning MT)
30,80662,664
Change in Quantity Sold on GDT
over same period last year
(7.2%)(6.2%)
Weighted Average Product Price
(USD/MT)
3,0203,044
Change in Weighted Average
Product Price over same period
last year
(8.4%)(7.8%)
Change in Weighted Average
Product Price from previous event
(1.5%)–
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.
MENA
Middle East – North Africa.
MPC
Milk Protein Concentrate.
Non-Reference Products
All dairy products, except
for Reference Products,
produced by the NZ
Ingredients business.
NZMP
New Zealand Milk Products.
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