Fonterra Boosts Farmgate Milk Prices Amidst Global Market Challenges
However, the Victorian Farmers Federation United Dairyfarmers of Victoria (VFF UDV) warns that domestic prices remain below global benchmarks. They emphasize the need for strong protections under the Mandatory Dairy Code of Conduct to safeguard farmers against unfair practices.
Matt Watt from Fonterra Oceania reassured that this price adjustment demonstrates Fonterra's commitment to passing on market improvements to farmers.
VFF UDV President Bernie Free applauded the move but stressed the continued pressures faced by Australian farmers, including rising input costs and climate-related challenges.
The company is considering both a trade sale and an initial public offering (IPO) for its businesses, which include well-known brands like Anchor and Mainland.
US-based companies like Klarna and StubHub have paused their IPOs due to current market uncertainties, exacerbated by inconsistent tariff policies. The challenges in the global markets have resulted in significant losses in indices since 2020.
Matt Montgomerie, Forsyth Barr senior equity analyst, posits that the current market turmoil should have minimal impact on Mainland Group’s operations. He notes that downward pressure on valuations exists, which may affect the potential IPO plans. However, Montgomerie expects the market conditions to continue evolving quickly.
Fonterra's last update reflected a promising EBIT growth for Mainland Group by 16% in the first half of 2025. If sustained, this positions the Mainland Group’s earnings favorably despite broader market volatility. Before moving forward, Fonterra plans to consult its farmer shareholders on their preferred divestment method.
