Global Dairy Update November 2020

• First quarter business update.
Visit our website for
more details –
• Expanding our Foodservice reach in the US.
1
Global Dairy
UPDATE
• New Zealand production to end October
slightly ahead for the season. Australia
monthly production down. US and EU
monthly production increases.
• EU and US exports up, while New Zealand
and Australia exports decline.
• Strong growth in China imports and Middle
East and Africa and Asia monthly imports
increase. Latin America imports decline.
• Fonterra’s season-to-date New Zealand milk
collection reached 527 million kgMS at the end
of October, flat on the prior season.
• Fonterra's Australia milk collection for
October decreased 7.7% to 12.4 million kgMS,
compared to last season.
• Sustainability Report shows most encouraging progress
to date.
• The next issue of the Global Dairy Update will be published
on 29 January 2021.
Key Dates
December to February 2021
Application Period to
Supply Fonterra
March 2021
FY21 Interim Results
Announcement
20 April 2021
Share Standard Compliance
Date for 2020/21 Season
NOVEMBER 2020

%
%
%%
%
%
%%
Change for October 2020
compared to October 2019
Change for October 2020
compared to October 2019
Change for October 2020
compared to October 2019
Change for September 2020
compared to September 2019
Change for the 12 months
to October 2020
Change for the 12 months
to October 2020
Change for the 12 months
to October 2020
Change for the 12 months
to September 2020
2.30.30.8
2.50.21.8
1.2
0.6
2
OUR MARKETS
Global Production
New Zealand production to
end October slightly ahead
for the season. Australia
monthly production
down. US and EU monthly
production increases
New Zealand milk
production¹ increased
0.8% on a litres basis (up
0.3% on a milk solids basis)
in October compared to
October last year.
Milk production growth
slowed in October as dry
conditions affected soil
moisture levels, especially in
the North Island. Ongoing
challenging conditions
during November are having
an impact on grass quality.
New Zealand milk
production for the 12 months
to October was 0.6% higher
than last year.
Fonterra collections are
reported for October, see
page 5 for details.
Australia milk
production decreased
0.3% in October compared
to October last year.
Milk production slowed
in October as challenging
wetter than usual spring
conditions affected
regions such as Victoria
and Tasmania.
Dairy Australia has forecast
a 1% to 3% increase
in production for the
2020/21 season.
Australia milk production for
the 12 months to October
was 2.5% higher than
last year.
Fonterra collections in
Australia are reported for
October, see page 5 for details.
EU (including UK) milk
production increased by
1.2% in September compared
to the same period last year,
the strongest production
growth since February
this year.
The increase in production
was observed across most
countries and notably
led by Poland (up 2.6%),
Spain (2.2%), Italy and
France (1.1% each).
EU milk production for the
12 months to September was
up by 0.2% compared to the
same period last year.
US milk production
increased by 2.3% in October
compared to the same
period last year.
Higher production volumes
in October were the result
of stronger milk yields
and rapidly growing herd
sizes combined with lower
culling rates.
Milk production for the 12
months to October was
1.8% 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
EU and US exports up,
while New Zealand
and Australia
exports decline
Total New Zealand dairy
exports decreased by 0.4%,
or 815 MT, in September
compared to the same
period last year.
Fluid milk products, WMP
and SMP demand from
China remained strong,
increasing 5,587 MT
year-on-year, however this
was offset by decreases in
infant formula and cheese,
down a combined 6,953  MT.
Exports for the 12 months
to September were down by
2.0%, or 68,493 MT, on the
previous comparable period.
This was primarily driven
by SMP, fluid milk products,
infant formula and cheese
but offset by increases
in WMP.
EU (including UK) dairy
exports decreased by 3.7%,
or 17,724 MT, in August
compared to the same
period last year.
This was driven by decreases
across most product
categories and more
specifically SMP and WMP
to Algeria and Nigeria but
partially offset by increases
in fluid milk products to
China and lactose to China
and New Zealand.
Exports for the 12 months
to August were up 4.6%, or
257,880 MT, on the previous
comparable period. Butter,
cheese, fluid milk products
and whey were the main
drivers of this growth, up
a combined 293,913  MT,
partially offset by a decline
in SMP.
US dairy exports
increased 4.4%, or 8,322  MT,
in September compared to
the same period last year.
Year-on-year exports
continued to grow for the
13th consecutive month,
primarily driven by increased
whey demand from China
attributable to recovering
hog herds, and cheese to the
Asia Pacific region. Although
SMP export volumes declined
to Mexico, they increased to
South East Asia.
Exports for the 12 months to
September 2020 were up
12.3%, or 273,366 MT on the
previous comparable period,
driven by SMP, WPC, whey
and lactose up a combined
258,474  MT.
Australia dairy exports
increased by 13.5%, or
7,660 MT, in September
compared to the same
period last year.
This was primarily driven by
increased demand for SMP
and fluid milk products, up
a combined 8,509 MT and
partially offset by decreases
in cheese and infant formula,
down a combined 3,530  MT.
Exports for the 12 months
to September were down
4.5%, or 34,884 MT, on the
previous comparable period.
Declines were recorded
across a broad range of
products with infant formula,
SMP, cheese, WMP, and
whey, down 42,857 MT and
partially offset by fluid milk
products, up 8,691  MT.
NEW ZEALANDAUSTRALIAEUROPEAN UNION/UKUSA
%
%
%%
%
%
%%
Change for September 2020
compared to September 2019
Change for September 2020
compared to September 2019
Change for September 2020
compared to September 2019
Change for August 2020
compared to August 2019
Change for the 12 months
to September 2020
Change for the 12 months
to September 2020
Change for the 12 months
to September 2020
Change for the 12 months
to August 2020
4.413.50.4
4.54.612.3
3.7
2.0

To view a chart that
illustrates year-on-year
changes in imports –
4
OUR MARKETS
Global Imports
Strong growth in China
imports and Middle
East and Africa and
Asia monthly imports
increase. Latin America
imports decline
Latin America dairy
import volumes¹ decreased
12.7%, or 18,901 MT, in August
compared to the same period
last year. This was driven
by lower volumes of SMP
to Mexico.
Imports for the 12 months
to August 2020 were down
4.0% or 70,071 MT, compared
to the same period the
previous year.
Decreases were driven
primarily by SMP infant
formula, WMP, and butter
down a combined 67,522  MT.
Asia (excluding China)
dairy import volumes¹
increased 2.1% or 8,041  MT,
in August compared to
the same period last year.
Increases were recorded for
whey and WMP to Vietnam
and Thailand, infant formula
and fluid milk products to
Philippines and partially offset
by declines in butter and SMP.
Imports for the 12 months to
August were down 3.5%, or
171,274 MT, compared to the
same period the previous year.
Decreases were recorded
across WMP, SMP, fluid
products, down a combined
207,018 MT and offset
partially by increased volumes
in lactose, up 39,633  MT.
Middle East and Africa
dairy import volumes¹
increased 15. 6% or 46,750 MT
in August 2020 compared
to the same period last
year. Increases were driven
principally by higher volumes
of SMP to Ethiopia and WMP
to Algeria, up a combined
42,613 MT, and partially offset
by lower volumes of infant
formula to Nigeria.
Imports for the 12 months
to August 2020 were
down 5.6%, or 222,447  MT,
compared to August last year,
driven by decreases in fluid
milk products, infant formula
and butter down a combined
356,235 MT and offset by
increases in SMP.
China dairy import
volumes increased by 24%
or 54,847 MT, in September
compared to the same
period last year.
Import volumes of fluid
milk products continued
to increase as milk drinks
consumption rose during the
pandemic (up 17,429 MT).
Germany, New Zealand,
Australia, Poland and France
were the top suppliers.
Whey was also up 15,663 MT
as China rebuilds its hog
herd and uses whey as feed.
SMP imports also increased
7,931 MT year-on-year.
Imports for the 12 months to
September were up 9.0% or
276,736 MT, driven by whey,
fluid milk products and WMP.
LATIN AMERICAASIAMIDDLE EAST & AFRICACHINA
1 Estimates are included for those countries that have not reported data.
%
%
%%
%
%
%
Change for August 2020
compared to August 2019
Change for September 2020
compared to September 2019
Change for August 2020
compared to August 2019
Change for August 2020
compared to August 2019
Change for the 12 months
to August 2020
Change for the 12 months
to August 2020
Change for the 12 months
to August 2020
24.0
2.112.7
3.55.6
%
Change for the 12 months
to September 2020
9.0
15.6
4.0

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 October
Season to date
1 June to 31 October
Season to date
1 June to 31 October
Season to date
1 June to 31 October
Change for October 2020
compared to October 2019
Change for October 2020
compared to October 2019
Change for October 2020
compared to October 2019
Change for October 2020
compared to October 2019
7.72.40.11.0
2.50.71.20.5
VOLUME M LITRESDAY
JUNJULAUGSEPOCTNOVDECJANFEBMARAPRMAY










5
OUR MARKETS
Fonterra Milk Collection
NEW ZEALANDNORTH ISLANDSOUTH ISLANDAUSTRALIA
New Zealand Milk Collection
Fonterra's Australia
collection was 12.4 million
kgMS, a 7.7% decrease on
October last season. Widespread
rainfall has laid the foundation
for a very good season, but a La
Niña weather system delivering
wetter and cooler conditions,
impacted pasture availability.
This resulted in off-farm milk
supply reducing across Victoria
and Tasmania. Third-party
volumes were also lower
compared to October 2019 due
to reduced availability and an
active choice not to purchase,
given the focus on higher-
value products.
North Island milk collection
in October was 128.6 million
kgMS, down 0.1% on October
last season.
Season-to-date collection
was 343.7 million kgMS, 1.2%
ahead of last season.
Soil moisture levels in the
northeast of the North Island,
and Taranaki were well below
normal for October, with
above average temperatures
for most of the North Island.
Rainfall provided relief from
low soil moisture levels in some
areas, lessening the impact
on collections.
South Island milk collection
in October was 84.5 million
kgMS, down 2.4% on October
last season.
Season-to-date collection was
183.8 million kgMS, down 0.7%
on last season.
South Canterbury and
coastal Otago also saw low
soil moisture levels, with the
impact lessened by availability
of irrigation in some areas,
and wetter conditions further
south. Otago and Southland
collections were impacted
by colder conditions that
accompanied the rain.
Fonterra's New Zealand
collection for October was
213.1 million kgMS, down
1.0% on October last season.
Season-to-date collection
to the end of October was
527.5 million kgMS, 0.5%
ahead of last season.
Poor grass condition from late
October to early November
impacted collections across
much of the North Island
and parts of the South
Island. Farmer response has
since seen production begin
to recover, which has been
assisted by recent rain.
%
%
%%
Forecast Farmgate Milk Price for
the 2020/21 season
Forecast milk collection for the
2020/21 season
per
kgMS
6.70-
7. 3 0
1, 52 5
M
kgMS
Outlook
NZD
The inclusion of off-GDT
sales contributed
approximately four cents
per kgMS to the
Milk Price for the season
to 31 October 2020.

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





,
,
.

.

.

.

.
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 New Zealand dollar
ranged between 65.5 and 67.5
US cents for most of October
before climbing above 69
US cents in November as
uncertainty regarding the US
elections was all but removed,
and positive announcements
of COVID-19 vaccine
developments were released.
Fonterra GDT results at
last trading event
1 December 2020:
The next trading event will be held on 15 December 2020. Visit www.globaldairytrade.info for more information.
Change in Fonterra’s
weighted average product
price from previous event
3.5
Fonterra’s weighted
average product price

(USD/MT)
3,287
USD
Fonterra product quantity
sold on GDT
000’ MT
31.3
NORTH ASIA (INCLUDING CHINA)
SOUTH EAST ASIA
MIDDLE EAST AND AFRICA
LATIN AMERICA
OTHER
USD 3,986/MT
3.9
BUTTER
USD 3,734/MT
2.6
CHEDDAR
USD 2,906/MT
3.3
SMP
USD 4,278/MT
2.5
AMF
USD 3,182/MT
4.8
WMP
31,264
MT
LATEST AUCTION
298,858
MT
FINANCIAL
YEAR‑TO‑DATE

7
Our Performance
Expanding our
foodservice reach in
the US
To accelerate demand for
its foodservice products
in the US, Fonterra has
entered a sales and
marketing agreement
with one of America’s
leading dairy co-operatives,
Land O’Lakes, Inc.
The arrangement will give
the Co-op opportunities
to expand the reach of
Fonterra’s foodservice
products into other US
foodservice outlets.
Fonterra’s Global Director
Foodservice, Paul Harvey,
says the US is not only the
largest dairy foodservice
market in the world, it’s also
the most competitive.
“Land O’Lakes works with
all major US national and
top regional foodservice
distributors and this will
help enable potential
national distribution of
Fonterra products.
“While Fonterra has been
in the US foodservice
market for a number of
years, breaking into it at
any great scale requires a
fresh approach. By working
with Land O’Lakes, we will
have access to a strong,
well-established distribution
network and their large
customer base.
With 2019 annual sales of
$14 billion, Land O'Lakes is
one of the nation's largest
co-operatives and operates
some of the most respected
brands in agribusiness
and food production
including Land O’Lakes
Dairy Foods, Purina Animal
Nutrition, WinField United
and Truterra. It also does
business in all 50 states and
more than 60 countries.
“A big part in securing
the partnership was our
reputation for developing
a range of innovative dairy
products, along with our
commitment to food safety
and quality, which gives
people confidence to choose
our products.
“Land O’Lakes will help us
distribute, promote and sell
our cooking creams and
cream cheese and, in the
future, we will look to expand
our relationship into other
categories such as cheese
products,” Paul Harvey adds.
“We are excited to leverage
the knowledge and expertise
our two co-operatives have
in dairy with a broader
portfolio of products
designed to help foodservice
operators make the most
of dairy in their kitchens,”
says Catherine Fox, Vice
President, Marketing,
Land O’Lakes Dairy Foods.
Greg Somerville,
Vice-President, Sales,
Land O’Lakes Dairy Foods,
added, “As a result of
COVID-19, performance
products in foodservice will
be of utmost importance to
operators. The Land O’Lakes
foodservice sales team is
looking forward to adding
Fonterra’s high-performance
products to our portfolio,
which will enable us to
provide an expanded
range of solutions to
existing and new segments
and operators.”
Paul says that, when Fonterra
launched its value-focused
strategy last year, it was
clear it would develop its
foodservice markets.
“We want to do this by
collaborating more with
like-minded partners,
leveraging our intellectual
property and skills, rather
than making significant
capital investments of our
own. This agreement with
Land O’Lakes is a great
example of this and one we
could look to apply in other
markets too.”

Our Co-op
8
Sustainability
Report shows most
encouraging progress
to date
Fonterra achieved its most
encouraging sustainability
results since starting its
annual reporting four years
ago, but the Co-op is staying
focused on what still needs
to be done to reach its
long-term targets.
“The progress we’ve made
this year towards our three
interconnected goals of
healthy people, a healthy
environment and a healthy
business show that our
strategy and customer-led
operating model are
delivering,” says CEO
Miles Hurrell, following the
release of Fonterra’s 2020
Sustainability Report.
“We’re proud of what our
people have achieved,
especially in the face of
COVID-19, and want to thank
farmers and employees for
their support and hard work.”
The report shows that
Fonterra improved all three
of its core environmental
metrics around greenhouse
gas (GHG) emissions,
water use and solid waste
to landfill for the first time
since launching its first
stand-alone Sustainability
Report in 2017, as well
as lifting its financial
performance and continuing
to support communities.
Among other highlights
in the report, Fonterra
has become the first dairy
company in New Zealand to
have its emission reduction
targets endorsed by the
UN-backed Science Based
Target initiative. This means
the Co-op’s 2030 target of
30% reduction in Scope 1
and 2 GHG emissions, which
are the emissions it directly
creates and those from the
energy it uses, has been
approved as being in line
with what the latest climate
science says is needed to
limit global warming to well
below 2°C.
“We take the best of what
New Zealand has to offer to
consumers around the world
through the unique quality
of our milk, so of course
we want to play our part in
helping the country meet
its climate commitments,”
says Mr  Hurrell.
“Our farmer owners have
a carbon footprint of
about one third of the
world average, and we’re
continuing to support
them to adapt to change.
Setting science-based
targets is important and
so is the concrete action
we’re taking today – like
providing farmers with
farm-specific emissions
profiles, which will help them
identify opportunities for
improvements, and switching
our Te Awamutu site to wood
pellets, which will reduce our
coal use by almost 10% .”
Increasing the energy
efficiency of existing assets
is also key. This year, the
Co-op hit its longest running
target of 20% reduction in
energy intensity across its
New Zealand manufacturing
sites between 2003 and
2020, which is enough
energy saved to power all the
households in Aotearoa for
1.5 years. As part of the plan
to reach a 30% reduction
in emissions by 2030,
and ultimately net zero
emissions by 2050, Fonterra
is developing site-specific
‘Greenprints’ that outline the
roadmap to decarbonisation.
The report also highlights
areas for improvement
including the need to
achieve better gender and
ethnic diversity at leadership
level and accelerate progress
towards key 2025 targets
such as having 100%
reusable, recyclable or
compostable packaging.
Global Sustainability Director
Carolyn Mortland says the
Sustainability Advisory Panel
provides a valuable external
lens as Fonterra works
towards these goals.
“Our Co-op’s focus is on
adopting regenerative
principles across the
business so that we’re
restoring and replenishing
rather than just protecting
and conserving. This will
take time, and we can’t do
it alone, but we need to get
it right to ensure a better
future for our business,
people, animals, natural
resources and taonga.”
Read the full
2020 Sustainability Report –

9
Our Co-op
2020
Sustainability
by the numbers

PRODUCTION
AUSTRALIAAVERAGE
UNITED STATES
NEW ZEALANDEUUK
DEC JUL JUN MAY MAR FEB JAN SEP NOV OCT AUG APR 
LIQUID MILK M LITRES











,
EXPORTS
AUSTRALIA
UNITED STATES
NEW ZEALANDEUUK
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
10

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/UK to September; New Zealand, US and Australia to October.
NOTE: Data for EU/UK to August; New Zealand, Australia and US to September.
NOTE: Data for Asia, Middle East & Africa and Latin America to August; China to September.
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
11

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)
OCTOBER
2020
OCTOBER

2019
MONTHLY
CHANGE
SEASON-
TO-DATE
2020/21
SEASON-
TO-DATE
2019/20
SEASON-
TO-DATE
CHANGE
Total Fonterra
New Zealand
213.1215.3(1.0%)527.5524.70.5%
North Island128.6128.7(0.1%)343.7339.61.2%
South Island84.586.6(2.4%)183.8185.1(0.7%)
Australia12.413.5(7.7%)35.736.6(2.5%)
Fonterra GDT results
This table provides more
information on the latest
results, including a snapshot
of the year-to-date results.
LAST TRADING EVENT
(1 DECEMBER 2020)
YEAR-TO-DATE

(FROM 1 AUGUST 2020)
Quantity Sold on GDT
(Winning MT)
31,264298,858
Change in Quantity Sold on GDT
over same period last year
(11. 1%)(8.6%)
Weighted Average Product Price
(USD/MT)
3,2873,121
Change in Weighted Average
Product Price over same period
last year
(6.0%)(7.5%)
Change in Weighted Average
Product Price from previous event
3.5%–
Fonterra GDT results
This chart shows Fonterra
GDT prices and volumes over
the past 12 months.

12
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