Shares & Units

The Fonterra Shareholders’ Market (FSM) is the farmer-only market where farmers trade shares in our Co-operative between themselves.
Under the Flexible Shareholding capital structure introduced in March 2023, farmers who supply milk to Fonterra need to hold a minimum of one share for every three kilograms of milk solids (kgMS) supplied and can go up to a maximum of 4x their milk supply in shares.
Prior to that, farmers needed to hold one share for every kgMS supplied, while the maximum share allowance was only 2x a farm’s milk supply.

Flexible Shareholding also enables Sharemilkers, Contract Milkers and Farm Lessors of a farm supplying the Co-op to join and hold shares.

The Fonterra Shareholders Fund (the Fund) is the other key part to our Co-operative’s capital structure. It is listed on the NZX Main Board and on the ASX, and units in the Fund can be bought and sold by the public in the same way as any other listed security. Units in the Fund give the holder access to the economic rights in a share (such as distributions or dividends). Like any member of the public, farmers can also trade units in the Fund.

Fonterra Shareholders' Fund
Read more on the Fonterra Shareholders’ Fund and view the profiles of the Board of the Manager of the Fund.
Farmgate Milk Price Calculation

The Farmgate Milk Price is calculated by:

  • Determining the revenue that Fonterra would earn if the equivalent of all the milk Fonterra collects was converted into commodity specifications of whole milk powder (WMP) and skim milk powder (SMP), and their by-products which are buttermilk powder (BMP), butter and anhydrous milkfat (AMF). These are the products that currently make up the ‘Reference Commodity Products’. Prices largely reflect US dollar prices achieved on the twice-monthly GlobalDairyTrade (GDT) trading events, converted to New Zealand dollars using Fonterra’s actual average monthly foreign exchange conversion rate.

  • Deducting costs, including the cost of transporting raw milk to factories, and the cost of efficiently manufacturing Reference Commodity Products and then transporting them to the point of export from New Zealand, along with selling and administration expenses. They also include an amount for depreciation of fixed assets and an appropriate return on investment, including investment in working capital. To the extent feasible and where doing so is consistent with the Farmgate Milk Price Principles, costs are derived from Fonterra’s actual costs associated with these activities.

The balance comprises the aggregate amount payable to farmer shareholders. This is an aggregate amount but is usually referred to on the basis of a Farmgate Milk Price per kgMS.

The Farmgate Milk Price methodology has been reviewed by competition experts Compass Lexecon, as described in the media release International Experts Endorse Fonterra Milk Price Formula.

Fonterra Shareholders' Market (FSM) Rules Document

Listing rules for the Fonterra Shareholders' Market operated by NZX.

Key contracts and deeds


FSF Governing Document




FSF Authorised Fund Contract


TAF Prospectus - October 2012


Supply Offer - May 2013


Custody Trust Deed for Economic Rights Trust - dated 25 October 2012


Shareholding Deed - dated 23 October 2012


RVP Custody Deed - dated 25 October 2012


Deed Poll in favour of FSM Partcipants given by the Custodian in favour of FSM Participants on 25 October 2012