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Fonterra Warns El Niño Threatens Milk Supply
24 Sep
Summary
- El Niño may affect milk volume growth late in the 2026/27 season.
- Fonterra anticipates 2027 earnings per share between 65 and 85 NZ cents.
- The dairy exporter will invest NZ$1 billion to expand protein manufacturing.
New Zealand's Fonterra has issued a warning that the intensifying El Niño weather phenomenon poses a risk to milk volume growth, potentially affecting the later stages of the 2026/27 season. This event is associated with extreme weather and impacts on global crop output, with El Niño expected to strengthen further into 2027.
Fonterra projects fiscal 2027 underlying earnings per share to be between 65 and 85 New Zealand cents. This forecast comes as the company reported a significant increase in profit after tax for fiscal 2026, more than doubling from the previous year to NZ$2.61 billion. This boost was attributed to gains from asset sales and robust demand for protein-rich products.
Looking ahead, Fonterra plans to invest NZ$1 billion over the next three years to expand its protein manufacturing network in the South Island, responding to increasing global demand for nutrient-dense foods. The company also declared a final dividend of 33 New Zealand cents per share, bringing the total annual payout to 73 NZ cents.
