Global Dairy Update July 2021

•Farmer feedback set to shape revised capital
structure proposal.
1
Global Dairy
UPDATE
• S
tart of new season in New Zealand. US, EU
a
nd Australia monthly production up.
•A
ustralia, New Zealand and US monthly
exports continue to grow while EU monthly
exports ease.
•
Increase in imports across China, Asia and
Latin America. Middle East and Africa monthly
imports ease.
•F
onterra's New Zealand milk collection
for the first month of the 2021/22 season
was 14.6 million kgMS, less than 1% of the
full season.
•
Fonterra’s Australian collection reached
105.8 million kgMS for the full 2020/21 season
to 30 June 2021, a 1.8% decrease compared to
last season.
•Cow manure to fire up the barbecue.
Key Dates
31 July 2021
End of Financial Year 2021
23 September 2021
FY21 Annual Results
Announcement
December 2021
FCG/FSF Annual Meetings
J U LY 2 0 2 1

%
%
%%
%
%
%%
Change for June 2021
compared to June 2020
Change for June 2021
compared to June 2020
Change for May 2021
compared to May 2020
Change for May 2021
compared to May 2020
Change for the 12 months to
June 2021
Change for the 12 months
to June 2021
Change for the 12 months
to May 2021
Change for the 12 months
to May 2021
2.92.61.8
1.10.42.5
2.3
2.6
2
OUR MARKETS
Global Production
Start of the new season
in New Zealand. US, EU
and Australia monthly
production up
New Zealand milk
production¹ increased 1.8%
on a litres basis, (up 1.6%
on milk solids basis) in June
compared to June last year.
June typically represents
about 1% of the total
season’s production.
New Zealand milk
production for the 12 months
to June was 2.6% higher than
last year.
Fonterra collections are
reported for June, see page 5
for details.
Australia milk
production increased 2.6%
in May compared to May
last year.
Increasing farmer confidence
and good seasonal
conditions are yet to
materialise into significant
milk growth primarily due to
lower herd numbers, farm
exits and labour shortage.
Dairy Australia is forecasting
milk production to be -1% to
+1% for the 2020/21 season.
Australia milk production for
the 12 months to May was
1.1% higher than last year.
Fonterra collections in
Australia are reported for
June, see page 5 for details.
EU milk production²
continued to improve and
increased by 2.3% in May
compared to the same
period last year.
Strong volumes were
observed in Italy, (up 10.6%)
on the back of very low
volumes last year, and
increases in Ireland up 6.1%,
Poland up 1.5% and Spain
up 1.0%.
EU milk production for the
12 months to May was up by
0.4% compared to the same
period last year, driven by
higher volumes from Ireland,
Poland, Italy and Sweden.
US milk production
increased by 2.9% in June,
compared to the same
period last year.
June production continued
to grow year on year, albeit
at a slower pace, following
extreme heat in some
regions. A contraction in
herd size was also observed
following more than 12
months of expansion as a
result of higher input costs.
Milk production for the 12
months to June was 2.5%
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 Excludes UK.

To view a chart that
illustrates year-on-year
changes in exports –
3
OUR MARKETS
Global Exports
Australia, New Zealand
and US monthly exports
continue to grow while EU
monthly exports ease
Total New Zealand dairy
exports increased 19.6% or
51, 642 MT, in June compared
to the same period last year.
The increase was driven by
record volumes of WMP, up
49,558 MT year-on-year, or
45%, to China and South
East Asia.
Exports for the 12 months
to June were up by 4.5%, or
153,613 MT, on the previous
comparable period. This was
primarily driven by WMP,
fluid milk products and
cheese but partially offset
by declines in SMP, AMF and
infant formula.
EU dairy exports
decreased by 0.9%, or
6,030 MT, in April compared
to the same period last year.
April exports saw lower
demand for infant formula,
cultured products, SMP and
butter. This was partially
offset by strong volumes
of fluid milk products
and cheese.
Exports for the 12 months
to April were up 2.8%, or
197,726 MT, on the previous
comparable period. Fluid
milk products, whey, cheese
and lactose were the main
drivers of this growth, up a
combined 364,439 MT. It was
partially offset by declines
in SMP, infant formula, MPC
and MPI.
US dairy exports
increased 10.8%, or
25,097 MT, in May compared
to the same period last year.
Strong demand for SMP
from Mexico and Algeria
are driving this increase.
Shipments to China of
whey, SMP and fluid milk
products also strengthened
in May. Partially offsetting
this increase was a decrease
in cheese export volumes
of 4,408 MT, or 12%, on the
back of rising prices.
Exports for the 12 months to
May 2021 were up 11.9%, or
281,232 MT on the previous
comparable period, driven by
SMP, whey, WPC and cheese,
up a combined 267,303  MT.
Australia dairy exports
increased by 43.6%, or
23,398 MT, in May compared
to the same period last year.
Continued strong demand,
primarily from China, in fluid
milk products, up 5,795  MT,
SMP up 5,628 MT, WMP
up 4,884 MT and cheese,
up 1,782 MT are driving
this increase.
Exports for the 12 months
to May were up 13.6%, or
97,546 MT, on the previous
comparable period.
This was predominantly
driven by increases in fluid
milk products, SMP and
butter but partially offset by
declines in infant formula.
NEW ZEALANDAUSTRALIAEUROPEAN UNIONUSA
%%%
%%%
Change for June 2021
compared to June 2020
Change for May 2021
compared to May 2020
Change for May 2021
compared to May 2020
Change for April 2021
compared to April 2020
Change for the 12 months
to June 2021
Change for the 12 months
to May 2021
Change for the 12 months
to May 2021
Change for the 12 months
to April 2021
10.843.619.6
13.62.811.9
0.9
4.5
%
%

To view a chart that
illustrates year-on-year
changes in imports –
4
OUR MARKETS
Global Imports
Increase in imports
across China, Asia and
Latin America. Middle
East and Africa monthly
imports
ease
Latin America dairy
import volumes¹ increased
3.0%, or 3,831 MT, in April
compared to the same
period last year.
The increase was driven by
stronger volumes across
most product categories, in
particular, cheese to Mexico
and Chile, WMP to Peru, and
WPC to Mexico. This was
partially offset by a large
decrease in SMP to Mexico.
Imports for the 12 months
to April were up 4.3% or
75,042 MT compared to the
same period last year.
Asia (excluding China)
dairy import volumes¹
increased 17.0 % or
65,077 MT, in April compared
to the same period last year.
The increase was driven
by higher imports across
most categories. There were
higher volumes of SMP to
the Philippines and Vietnam
and lactose to Nepal.
Imports for the 12 months
to April were up 2.7%, or
126,250 MT, compared to the
same period last year, driven
by higher volumes of SMP,
lactose and cheese.
Middle East and
Africa
dairy import vol
umes¹
decreased 0.1%
or 293 MT in
April compared to the same
period last year.
The decrease was driven
predominantly by lower
volumes of SMP and WMP
to Nigeria and Algeria but
partially offset by higher
imports of fluid milk
products to Iraq.
I
mports for the 12 months
t
o April were up 3.9%, or
148,923 MT
, compared to
the same period last year,
driven by increases in WMP,
infant formula and SMP, and
partially offset by declines
in fluid milk products
and butter.
China dairy import
volumes increased by
19.7 %, or 54,205 MT, in
June compared to June
last year and marked a
record import month for
June as China continues to
promote the consumption of
dairy products.
Strong volumes of WMP
imports continued in June,
sourced primarily from
New Zealand as well as
Uruguay and Australia.
Fluid milk products and
SMP also contributed to the
import growth.
Imports for the 12 months
to June were up 26.1% or
843,361 MT, driven by fluid
milk products, whey, SMP
and WMP.
LATIN AMERICAASIAMIDDLE EAST & AFRICACHINA
1 Estimates are included for those countries that have not reported data.
%
%
%%
%
Change for April 2021
compared to April 2020
Change for June 2021
compared to June 2020
Change for April 2021
compared to April 2020
Change for April 2021
compared to April 2020
Change for the 12 months
to April 2021
Change for the 12 months
to April 2021
Change for the 12 months
to April 2021
19.7
17.03.0
2.73.9
%
Change for the 12 months
to June 2021
26.1
0.1
4.3
%
%

To view a table that shows our
detailed milk collection in New
Zealand and Australia compared
to the previous season –
%
%%
For the 2021/20 Season
compared  to the previous season
Season to date
1 June to 30 June
Season to date
1 June to 30 June
Season to date
1 June to 30 June
Change for June 2021
compared to June 2020
Change for June 2021
compared to June 2020
Change for June 2021
compared to June 2020
Change for June 2021
compared to June 2020
13.730.19.20.9
1.830.19.20.9
VOLUME M LITRESDAY
JUNJULAUGSEPOCTNOVDECJANFEBMARAPRMAY










5
OUR MARKETS
Fonterra Milk Collection
NEW ZEALANDNORTH ISLANDSOUTH ISLANDAUSTRALIA
New Zealand Milk Collection
Fonterra's Australia
collection in June was
5.9 million kgMS, a 13.7%
decrease on June last season.
Farm milk collections were
reduced as isolated storms
and flooding impacted
production in Victoria. Third-
party volumes were also
actively reduced.
Full season collections were
1.8% down on last season,
with favourable on-farm
conditions throughout
stabilising milk production.
North Island milk
collection in June was
12 million kgMS, 9.2% higher
than June last season.
June collections benefitted
from unseasonably warm
weather. Much needed rain
was seen by most of the
North Island.
South Island milk
collection in June was
2.6 million kgMS, 30.1%
behind June last season.
Although a large variance
in percentage terms, South
Island volumes are low at
this time of the season.
The central and lower South
Island saw significant rain in
June and this, coupled with
frosty mornings, impacted
milk flows.
Fonterra's New Zealand
collection for June was
14.6 million kgMS, 0.9%
lower than the same month
last season.
As is normal for this time of
the season, collections for
June represent less than 1%
of the full season forecast.
%%%
%
%

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


,
,
,

.
.
.
.
.
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 NZD declined towards 69 US
cents as a global resurgence of
COVID-19 infections saw
increased demand for safe haven
assets such as USD; a more
pronounced decline was curtailed
as increasing inflationary
pressures in New Zealand
resulted in higher interest rates,
which in turn supported the NZD.
Fonterra GDT results at
last trading event
20 July 2021:
The next trading event will be held on 3 August 2021. Visit www.globaldairytrade.info for more information.
Change in Fonterra’s
weighted average product
price from previous event
2.2
Fonterra’s weighted
average product price

(USD/MT)
3,896
USD
Fonterra product quantity
sold on GDT
000’ MT
21.6
NORTH ASIA (INCLUDING CHINA)
SOUTH EAST ASIA
MIDDLE EAST AND AFRICA
LATIN AMERICA
OTHER
USD 2,978/MT
5.2
SMP
USD 4,022/MT
1.9
CHEDDAR
USD 4,419/MT
0.9
BUTTER
USD 5,615/MT
0.3
AMF
USD 3,730/MT
3.5
WMP
21,588
MT
LATEST AUCTION
667,393
MT
FINANCIAL
YEAR‑TO‑DATE

7
Farmer feedback set to
shape revised capital
structure proposal
With the first phase of
Fonterra’s capital structure
consultation now complete,
the Co-op is drawing up a
revised proposal that aims to
reflect farmers’ views.
A number of changes are
being considered to the
preferred option initially put
forward in the Consultation
Booklet in May – including
adjusting the proposed
minimum shareholding
requirement for farmers
and enabling sharemilkers
and contract milkers to
own shares.
“It’s a good time for the
Board to step back and
reflect on the feedback as
most farmers will now be
busy with calving. Once
they’ve come through this
particularly busy time of
the season, we’ll be ready
to consult on the updated
proposal,” says Chairman
Peter McBride.
Consultation has been
extensive to date,
starting with the initial
communication on 6 May
and the Consultation Booklet
being sent to every farmer
owner. Since then:
• Directors have held 90
farmer meetings, attended
events such as the My
Connect conference
and Field Days as well
as leading seven online
webinars and speaking with
many farmers directly.
• Over 5,000 farmers have
directly engaged through
feedback channels, in
addition to discussing the
options with each other.
• Members of Fonterra’s
Board and management
have also been talking
with other groups such as
the Co-operative Council
(formerly the Shareholders’
Council), the Fonterra
Shareholders’ Fund, the
Government, major banks
and rural professionals.
This engagement
will continue as the
consultation progresses.
“We would like to thank our
farmer owners for getting
involved and approaching
the consultation with open
minds,” says McBride.
“We also want to
acknowledge the uncertainty
that comes along with us
considering changes to
our capital structure and
the significant challenges
that it’s creating for some
farmers. The best way to
give certainty is to ensure
we have a full discussion
as a Co-op and get to a
quality outcome.
“The Board maintains
its belief that, in a flat or
potentially declining milk
environment, making
changes early will put us
in the best position to
provide farmers with more
flexibility while protecting
farmer ownership and
strengthening our Co-op’s
financial sustainability.”
Summary of farmer
feedback
Many farmers said that
additional information
on the Co-op’s business
strategy and future
performance would help
them form a clearer view on
capital structure.
“In August and September,
we will provide further
information on our long-
term strategy including the
types of activities we will
invest in, the returns we are
targeting, and the measures
against which we will track
our progress.”
McBride says farmers’
views have been varied and
heartfelt, but with some clear
themes coming through.
“We will seek to cater for
the diversity within our
ownership base, but it is
impossible to incorporate
every piece of feedback.
As a Co-op, we need to
be pragmatic and open to
compromise in order to
find a way forward together
that is in our best long-
term interests.”
A summary of the feedback
is available here, while
a high-level overview
of alternative proposals
submitted by farmers is
available here.
Proposed areas for change
The Board is considering
a number of changes as it
thinks about what a final
proposal could look like.
These include:
• Setting the minimum
shareholding requirement
at 33% of milk supply (or
1 share per 3 kgMS), rather
than 25% (or 1 share per
4 kgMS) as originally set
out in the preferred option.
• Enabling sharemilkers
and contract milkers to
hold shares if the Co-op
moved permanently to a
farmer-only market.
• Extending the entry time-
frame from five to six years.
• Extending exit time-frames
for all farmer owners on the
date of the vote to up to 10
or 15 years, including those
who have already ceased
in the past few seasons but
who still hold shares.
• Reviewing the market
maker role and looking
further at how potential
share buy-back options
might support liquidity in a
farmer-only market.
• Maintaining the share
maximum at 4x milk
supply to also help
support liquidity.
“We have also reconsidered
voting rights in light of some
feedback and at this stage
our preference is for voting
to continue to follow share-
backed supply as it currently
does,” adds McBride.
Next steps for consultation
Fonterra is committed to
moving as quickly as it can
through the capital structure
review while also taking the
time needed to consider
all views.
Over the next couple of
months, the Co-op plans
to do surveys and hold
focus groups to ask farmers
specific questions and test
different aspects of the
potential changes.
“This will help us as we
continue to develop a
more detailed proposal to
present to farmers around
the time of our annual
results in late September for
further consultation. At this
stage, we are still aiming for
a farmer vote at our Annual
Meeting, which will be
held in December.”
Our Performance
For further information –

Our Co-op
8
Cow manure to fire up
the barbecue
A study between Fonterra,
Beca, Firstgas Group and
EECA has found using
organic waste is a viable,
untapped solution to
provide an alternative to
New Zealand’s current
residential gas supplies,
with the potential to replace
nearly 20% of the country’s
total gas usage by 2050.
Biogas is created by
anaerobic digestion, where
bacteria breaks down organic
matter (such as food waste
or cow manure) to create a
gas, which, once cleaned, can
be used in existing pipeline
networks, appliances and
equipment, while saving up
to 19 times the emissions.
Fonterra already has
biodigesters at its Tirau
and Darfield sites where
bugs work to process fats
and proteins in wastewater,
cleaning the wastewater and
creating a gas. As well as
creating a gas there’s also a
nutrient dense product that
can be spread to paddocks
and crops as fertiliser.
Fonterra Head of Energy
and Climate, Linda Mulvihill
says the study provides
another potential option to
help the Co-operative get
to net zero emissions by
2050 “We’re committed to
playing our part to help the
country transition to a low
carbon future.
“We know the more
alternative energy sources
we have, the faster we will
be able to transition our
manufacturing operations
onto renewable energy
sources and off coal. This
study is a good example
of how government and
industry can work together
– sharing science, expertise
and experience – we can find
solutions for the good of
New Zealand.”
The Co-op recently
committed to getting out
of coal at its manufacturing
sites by 2037. Nine sites out
of 28 currently use coal, with
Te Awamutu being converted
to wood pellets last season
to reduce Fonterra’s coal
use by around 10 per cent,
the equivalent of taking
32,000 cars off the road.
Biodigester at Fonterra’s Darfield site
To read the Executive
Summary –
To read the full study –

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 May; New Zealand and US to June.
NOTE: Data for EU to April; US and Australia to May; New Zealand to June.
NOTE: Data for Asia, Middle East & Africa and Latin America to April; 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)
JUNE
2021
JUNE

2020
MONTHLY
CHANGE
SEASON-
TO-DATE
2021/22
SEASON-
TO-DATE
2020/21
SEASON-
TO-DATE
CHANGE
Total Fonterra
New Zealand
14.614.8(0.9%)14.614.8(0.9%)
North Island12.011. 09.2%12.011. 09.2%
South Island2.63.8(30.1%)2.63.8(30.1%)
MILK COLLECTION
(MILLION KGMS)
JUNE
2021
JUNE

2020
MONTHLY
CHANGE
SEASON-
TO-DATE
2020/21
SEASON-
TO-DATE
2019/20
SEASON-
TO-DATE
CHANGE
Australia5.96.8(13. 7%)105.8107.8(1.8%)
Fonterra GDT results
This table provides more
information on the latest
results, including a snapshot
of the year-to-date results.
LAST TRADING EVENT
(20 JULY 2021)
YEAR-TO-DATE

(FROM 1 AUGUST 2020)
Quantity Sold on GDT
(Winning MT)
21,588667,393
Change in Quantity Sold on GDT
over same period last year
(7.3%)(3.0%)
Weighted Average Product Price
(USD/MT)
3,8963,562
Change in Weighted Average
Product Price over same period
last year
20.5%9.0%
Change in Weighted Average
Product Price from previous event
(2.2%)–
Fonterra GDT results
This chart shows Fonterra
GDT prices and volumes over
the past 12 months.

11
AMENA
Africa, Middle East, Europe,
North Asia, Americas.
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.
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