Your Co-op recently capped a big financial year with strong milk volumes, a $9.69 Farmgate Milk Price and a significant capital commitment.
- Co-op and financials
- News
Article
Fonterra delivers strong FY26 results
- Co-op and financials
- News
29 Oct 2026
5 min read
Fonterra CEO Richard Allen announced the Co-op’s annual results in late September and described FY26 as a year of delivery, with the Co-op collecting, processing and shipping near-record volumes of milk and reliably delivering high-value products to customers around the world.
Strong numbers across the board
For FY26, the Co-op delivered:
- A final Farmgate Milk Price for 2025/26 of $9.69 per kgMS
- A final Organic Milk Price for 2025/26 of $14.13 per kgMS
- A final fully imputed dividend of 33 cents per share, bringing fully imputed total dividends to 73 cents per share
- Underlying operating profit for the continuing business of $1.8 billion and profit after tax of $1.2 billion
- A return on capital of 14.2%, above the target range of 10-12%
This FY26 delivery means the target set one year ago for earnings to return to FY25 levels within three years if the Consumer and associated businesses were divested has already been achieved. It’s a result that speaks to the strength of the focused business-tobusiness (B2B) strategy.
The Ingredients business delivered $1,293 million in operating profit, supported by strong global protein demand, favourable pricing and product mix decisions. In Foodservice, the Co-op achieved $547 million in operating profit, driven largely by volume and pricing growth across all product categories and markets.
Fonterra Chairman Peter McBride says the Co-op delivered at the top end of its performance expectations.
“Consistency is important to farmers and our shareholders. We’re proud of the collective effort that’s delivered another strong result, at the top end of our earnings guidance,” he says.
“The team hasn’t missed a beat despite the Mainland divestment process and the significant change that followed. Richard’s transition into the CEO role has been seamless and it’s exciting to see the energy his team is putting into building off this strong position.”
Richard Allen says the Co-op’s disciplined approach to strategic execution once again generated strong results.
“Despite some challenging conditions, including weather events and geopolitical volatility, we leveraged our full supply chain network and logistics partnerships to keep milk moving, achieving record shipping volumes and materially improving our delivery performance,” he says.
Investment plans for future growth
The Co-op also announced an incremental investment of $1 billion over the next three years in the South Island to accelerate and expand its protein manufacturing network and improve environmental performance across water and emissions.
“These projects position the Co-op to respond to changes in how people want to consume dairy, with a growing focus on sustainably produced, protein-rich and nutrient-dense foods,” Richard says.
“They are critical to our future value growth and improve our optionality, increase our capacity and, as a result, strengthen returns for farmers and shareholders over the long term.”
Once operational in 2029, this investment is also expected to create around 50-60 permanent jobs, with further economic flow-on benefits for local businesses involved in the construction phase.
Looking ahead to FY27
The Co-op is planning another season of strong milk supply for FY27, however, it’s keeping a close eye on the potential impacts of El Niño weather patterns.
The forecast earnings range is 65-85 cents per share. This range reflects confidence in the B2B strategy, as well as an acknowledgement that geopolitical volatility remains.
“We’ve delivered a strong set of results for FY26, executed on our priorities and positioned the Co-op for a new phase of value growth as a global B2B dairy ingredients provider,” Richard says.
“The sale of Mainland Group was a significant step forward. Now, as we head into an increasingly changing world, our farmers’ quality, grass-fed milk, combined with our flexible assets, reliable supply chain and deep customer and market presence will help us deliver growth into the long-term.
“We’re building on our strong foundations, focused on making Fonterra’s products the world’s most sought-after source of nutrition and fostering an enduring Co-op for generations.”
Another record high Organic Milk Price
Fonterra’s Organic farmers received a final organic milk price of $14.13 per kgMS for the 2025/26 season, up from last year’s record payout of $12.35 per kgMS and marking a sixth consecutive year of organic milk price increases.
There’s strong demand for organic dairy products, particularly in the United States, where constrained local supply has driven additional demand throughout FY26, says Fonterra’s General Manager Organic, Andrew Henderson.
“The breadth of our organic ingredient portfolio, enduring customer partnerships and strong market access put us in a good position to respond as supply conditions change across markets,” he says.
The Co-op remains focused on expanding the programme to meet demand, recruiting additional organic milk supply across both the North and South Island (Canterbury and below).
Fonterra’s Chief Growth and Strategy Officer, Elisa Giusti, says the record Organic Milk Price result recognises the contribution of organic farmers and the strength of the programme.
“A $14.13 organic milk price is a fantastic achievement and recognises the dedication of our organic farmers. As demand for New Zealand organic dairy continues to grow, we’re focused on building on this success and creating opportunities for more farmers to join the programme,” she says.
To learn more about organic farming, please contact your local Farm Source rep or Fonterra Organic relationship manager, Stuart Luxton at specialty.milks@fonterra.com.