Fonterra has introduced a new suite of milk price risk management tools designed to help farmers gain greater certainty over their income and better manage price volatility. These tools allow farmers to lock in a minimum milk price up to 18 months in advance, providing a valuable planning resource in an increasingly unpredictable market.

From 9 June, the new services will be introduced and will complement the current Fixed Milk Price programme. The services give the ability to lock in a Fixed Milk Price for an additional season as well as the ability to lock in a minimum Milk Price – or a minimum and maximum Milk Price –- for the current season.

Fixed Milk Price – Additional season

This will enable farmers to secure a fixed price for a portion of their milk for two seasons, providing great price certainty over a longer period:

The offer:

• Service fee is 13 cents per kgMS
• Volume up to a maximum of 30% in the following season
• Price based on SGX-NZX milk futures
• Service fee deductions come out in January/February – 5 cents out each month

Minimum Milk Price

This will enable farmers to secure a minimum price (or ‘floor’) for a portion of their milk. It’s designed to protect farmers from any decrease below the set minimum while ensuring they benefit from any increases to the forecast Farmgate Milk Price.

The offer:

• Service fee is 10 cents per kgMS
• Premium variable at each event
• Volume up to 50%
• Price generally at least 50 cents lower than the FMP offer
• Service fee and premium deductions come out in January/February.

Milk Price Range

The Milk Price Range offer will enable farmers to secure both a minimum price (floor) and maximum price (or ‘cap’) for a portion of their milk, helping to stabilise income within a range that farmers are comfortable with.

The offer:

• Service fee is 10 cents per kgMS
• Volume up to 50%
• Price as per the minimum Milk price, the floor will generally be at least 50 cents lower that the FMP offer.
• Service fee deductions come out in January/February – 5 cents out each month

The initiative reflects Fonterra’s commitment to supporting farmers with practical, transparent tools that help manage financial risk.

For more information, visit the Farm Source website or speak to one of our team.