Dairy Prices and Fonterra 2025

The story so far

From May 2025, high butter prices became a major concern for New Zealand consumers and businesses, with an Invercargill commercial bakery sourcing butter from overseas and shoppers queuing at an Auckland Costco, where cheap butter sold out in under half an hour despite purchase limits.^{21, 23 May 2025} Fonterra's chief executive said international demand was driving prices, and that the co-operative must reflect market trends to provide returns for its farmer owners.^{29 May 2025; 18 Jun 2025} Stats NZ reported food prices up 4.6 percent in the year to June 2025, and a 46.5 percent rise in the price of a 500g block of butter in the year to May.^{17, 24 Jul 2025} In July, Finance Minister Nicola Willis met Fonterra chief executive Miles Hurrell about why butter costs more in New Zealand than in Australia, saying New Zealanders were not getting a "raw deal".^{22, 23 Jul 2025} Hurrell blamed supermarkets and international prices and ruled out a two-tier pricing system for domestic and international customers, while Willis attributed high grocery costs to supermarkets.^{23, 24 Jul 2025}

Latest

Global dairy prices fell for an eighth consecutive auction in early December, to a near two-year low, though supermarket butter prices are not expected to fall as quickly or as far as they rose.^{3, 4 Dec 2025} Fonterra lowered its 2026 farmgate milk price forecast to a midpoint of $9.00 per kilogram of milk solids, citing a global supply glut and a rising New Zealand dollar.^{18 Dec 2025}

Key moments

1. 23 May 2025Costco butter sells out in under half an hour despite a 30-block limit.
2. 29 May 2025Fonterra's chief executive says global demand is pushing up butter prices.
3. 17 Jul 2025Stats NZ reports food prices up 4.6 percent, with butter among the drivers.
4. 23 Jul 2025Finance Minister meets Fonterra chief executive over high butter prices.
5. 24 Jul 2025Fonterra chief executive rules out cheaper two-tier pricing for New Zealanders.
6. 30 Oct 2025Fonterra farmers approve sale of Anchor and Mainland brands to Lactalis.
7. 3 Dec 2025Global dairy prices fall for an eighth consecutive auction.
8. 18 Dec 2025Fonterra cuts its 2026 farmgate milk price forecast to a $9.00 midpoint.

Written from the stories below; each sentence links to its sources.