Farming co-operative Fonterra has delivered a strong set of interim results for the first half of FY26. The co-op reported a net profit of $750 million after tax, up from $729 million, alongside revenue rising to $13.9 billion for the half. Operating profit also climbed to $1.23 billion.
Farmers received a further boost as Fonterra lifted its forecast Farmgate Milk Price midpoint to $9.70 per kilogram of milk solids, up from $9.50, with the range now sitting between $9.40 and $10.00—highlighting the benefits of strong global demand flowing back to producers.
An interim dividend of 24 cents per share for farmer shareholders and unit holders was announced, along with a 16 cent special dividend linked to its Mainland business.
Outgoing chief executive Miles Hurrell praised the results, pointing to strong demand, improving margins, and stable operations across the co-operative.
“The underlying performance of Fonterra’s continuing business is stable, allowing the co-op to return all earnings associated with the Mainland Group business and lift our forecasts for the remainder of the year ahead,” Hurrell said.
“Demand for our products is strong, and we’re focused on our plan to maximise both the farmgate milk price and earnings.”
The co-op recorded a return on capital of 11.2% over the past 12 months, up from 10.4% a year earlier, while earnings per share rose to 51 cents from 47 cents.
Fonterra also raised its full-year earnings outlook to a range of 50 to 65 cents per share, pointing to continued confidence in market conditions and internal performance.
Miles Hurrell said strong milk collections, particularly in the South Island, also underpinned performance, despite weather-related challenges during the season.
He said the changes were driven by strengthening global commodity prices, while warning that the ongoing conflict in the Middle East could introduce volatility into supply chains and commodity markets.
“The conflict is a complex and dynamic situation that is changing daily, but we are confident that we’re on the right track to get product to customers,” Hurrell said.
“Our business is designed to manage volatility.”
The result follows Miles Hurrell announcing last week that he would step down as chief executive and comes as Fonterra advances the unconditional $4.22 billion sale of its global consumer brands—including Anchor and Mainland—to French dairy giant Lactalis.
Commenting on the leadership change, Winston Peters described Hurrell’s resignation as “predictable” given the sale of New Zealand’s flagship brands to foreign ownership. Peters warned that handing iconic Kiwi products to overseas companies undermines national interests and the rural economy, emphasising the need for stronger protections for New Zealand’s farmers.
“Their decision leaves serious questions for New Zealand about what we must do to protect dairy manufacturing in our country as a result of Fonterra’s dereliction of duty,” Peters said.