Communication to Fonterra farmers

3 March 2021


Communication to Fonterra farmers

The attached communication was provided to Fonterra Co-operative Group Limited farmers by the Chief
Executive Officer, Miles Hurrell, on 3 March 2021.

-ENDS-.

For further information contact:

Fonterra Communications
24-hour media line
Phone: +64 21 507 072

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3 MARCH 2021
CHIEF EXECUTIVE OFFICER’S EMAIL: LAST NIGHT’S GDT RESULTS

Dear [name]
Last night’s GDT results were some of the strongest we have seen to date – in fact, I would
describe them as pretty extraordinary.
I also appreciate that many of you will be asking: What does this mean for our forecast
Farmgate Milk Price range?
That’s why I want to provide you with some further context to last night’s GDT auction and
what we’re doing as a result of it.
The three key pieces of context I would highlight are:
• An increase in dairy prices was expected, as reflected by the NZX Whole Milk
Powder futures contract yesterday being at $3,790 per metric tonne or a 5.7%
increase on the 17 February GDT event. However, a lift of 21% was not anticipated.
• We’ve continued to see strong demand for dairy from China and South East Asia,
and participation was high last night.
• The relative reliability of our supply chain versus that of others means buyers trust we
will be able to get our product to them and that’s also helping drive further demand
for our products.
We are now assessing the situation, running the numbers on our forecast Farmgate Milk
Price and talking to our sales teams on the ground in our markets to understand further what
they are seeing, regarding future demand.
While GDT results are one key input to the Farmgate Milk Price, there are many other
factors we need to consider – including, how far we are through the season, our sales book,
foreign exchange and any ongoing impacts from COVID-19.
As always, I will keep you updated.
Miles