Fonterra Reports Record $16.2B Payout Amid Global Dairy Demand Surge.
In a remarkable financial performance, Fonterra has reported a record $16.2 billion payout to its New Zealand farmer-shareholders for FY25, driven by strong international demand for premium dairy products. The cooperative collected 1,509 million kilograms of milk solids — a 2.6% rise over the previous year — generating a robust total revenue of $26 billion.
Chief Executive Miles Hurrell described FY25 as “one of the Co-op’s strongest years yet in terms of shareholder returns,” with the company’s focus on high-quality dairy ingredients and strategic global positioning paying off handsomely.
Fonterra’s operating profit jumped 13% to $1.73 billion, supported by favourable global market dynamics and operational efficiency. The Co-op announced a fully imputed dividend of 57 cents per share, translating into a $916 million return to shareholders and unit holders.
Strategic Shift: $4.22B Sale to Lactalis
As part of its long-term value creation strategy, Fonterra has agreed to sell its global Consumer and associated businesses to French dairy major Lactalis for $4.22 billion. This move will enable Fonterra to sharpen its focus on high-margin dairy ingredients and foodservice sectors.
The transaction is pending regulatory and shareholder approval, with voting scheduled for 30 October 2025. If approved, the sale will result in a significant capital return of $2.00 per share, equivalent to approximately $3.2 billion.
Future Outlook: Higher Milk Price, Infrastructure Expansion
Looking ahead to the 2025/26 season, Fonterra expects milk collections to reach 1,525 million kilograms of milk solids. The forecast midpoint Farmgate Milk Price is pegged at $10.00 per kilogram, within a range of $9.00–$11.00, reflecting stable supply-demand fundamentals and a favourable outlook for the global milk industry.
The cooperative is also investing in critical infrastructure to maintain its global competitiveness. Capital projects include protein processing expansion at Studholme and new cream production capacity at Edendale — both aimed at reinforcing Fonterra’s leadership in value-added dairy exports.
This landmark performance positions Fonterra firmly within the top tier of global dairy players and offers key insights for stakeholders monitoring the evolving dynamics of the dairy sector in India, primarily as Indian cooperatives aim to replicate global best practices in efficiency, exports, and product innovation.
