Fonterra's Announcement and Guidance for FY25

Fonterra Co-operative Group Ltd (ASX:FSF) has announced a 50 cent lift in its 2024/25 forecast Farmgate Milk Price midpoint to $9.00 per kgMS and FY25 earnings guidance of 40-60 cents per share. The increase in forecast Farmgate Milk Price is attributed to the recent strengthening in Global Dairy Trade prices and constrained milk supply in key producing regions.

Executive Commentary on FY25 Forecast

The lift in this season's forecast Farmgate Milk Price is welcome news for farmers, particularly when combined with the 55 cent total dividend for FY24. The forecast earnings range reflects an expectation to maintain strong margins in all three sales channels, while also investing in IT & digital transformation and incurring higher tax expenses.

Summary of Announcement and Outlook

Fonterra's announcement of the lift in forecast Farmgate Milk Price and FY25 earnings guidance indicates a positive outlook for the company. The increase is driven by the recent strengthening in Global Dairy Trade prices and constrained milk supply in key producing regions. The Co-op aims to maintain strong margins in all sales channels for FY25, while also investing in IT & digital transformation and incurring higher tax expenses. The company's commitment to sustainability and supporting communities remains at the core of its operations.