Shares & Units

As a co-operative, Fonterra requires supplying farmers to hold shares in proportion to the volumes of milk produced by each supplier each season.

Farmers can also hold shares not linked to milk supply, within certain limits. Only supplier farmers can be shareholders. They can buy and sell shares on the Fonterra Shareholders’ Market which is a private market for farmer shareholders.

Investors who are not suppliers can purchase units in the Fund. Farmer shareholders can also trade 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 F
armgate 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.

TAF 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