Shareholders’ Council Welcomes Increase in Price

MEDIA RELEASE

27 April 2010

Shareholders’ Council Welcomes Increase in Milk Price

Opportunity to invest in future prosperity of the co-operative

Auckland (27 April, 2010) - Fonterra Shareholders’ Council chairman Blue Read says it is encouraging for farmers to see an increase in the co-operative’s 2009/10 forecast milk price.

Fonterra announced a 40 cent increase in the forecast 2009/10 milk price to $6.10 per kilogram of milksolids (kgMS)

The co-operative’s full-year dividend forecast has today been maintained at 20-30 cents per share. In addition, the co-operative has reiterated its forecast that 10-30 cents per share of distributable profits will be retained for the full year.

The combination of Milk Price, dividends and retentions means Fonterra is on track to return for supplying shareholders a total of $6.40-$6.70 kgMS for the full year. That would be well ahead of the combined payout and retention of $5.70 kgMS for the 2008/09 year.

Mr Read said the improvement in milk price is heartening for supplying shareholders, especially at a time when many have faced the impact of drought conditions and are recovering from volatile markets in the past couple of years. Mr Read noted the increase will be welcomed by farmers contemplating further investment in the co-operative.

“It presents an opportunity for farmers to consolidate their personal financial position and if they are in a good position they can invest in the future prosperity of the co-operative,” Mr Read said.

He noted that the co-operative is currently consulting with shareholders on the concept of Trading Among Farmers, which would give the co-operative of a more stable capital base.

“With a more stable capital base and solid returns for shareholders our co-operative can continue to build on its success,” Mr Read said.

About the Fonterra Shareholders’ Council

The Fonterra Shareholders’ Council represents the interests of Fonterra farmers to the Board of the co-operative and plays an active role in monitoring and assessing the governance and performance of Fonterra. There are 35 Councillors who are all shareholders elected by their fellow farmers in wards across New Zealand.

ENDS

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