Rabobank expects New Zealand milk prices to approach $10/kgMS

Rabobank has said New Zealand’s farmgate milk price may finish the 2026/27 dairy season closer to $10 per kilogram of milk solids. Its assessment places the potential end-of-season price above Fonterra’s current opening forecast, which was cut in July.

Fonterra reduced that forecast from $9.75/kgMS to $9.25/kgMS. The change weakened expectations for farmer returns during the season, according to the report.

Emma Higgins, a senior agricultural analyst at RaboResearch, said the reduction in Fonterra’s forecast might not last. “We anticipate the final milk price for 2026/27 has room to land somewhere closer to $10/kgMS,” Higgins said.

Rabobank linked its assessment to two market conditions: a slowdown in global milk-supply growth and continued demand from Asian markets. The bank said those factors were supporting prices for dairy commodities.

The price discussed by Rabobank is a farmgate measure, expressed in dollars per kilogram of milk solids. It concerns the full 2026/27 season rather than only the opening payment or the price available at the time of the report.

Fonterra’s July forecast remains the lower published reference cited in the report, at $9.25/kgMS. Rabobank’s view was that the final outcome could move back towards the level of $10/kgMS as the season progresses, while Higgins described the downgrade as potentially “short-lived”.