Fonterra slashes forecast milk price, again
Fonterra has slashed another 50c off its milk price forecast as global milk flows shows no sign of easing.
The co-op says the investment is part of its strategy to scale up for long-term growth, make the best use of farmers' milk, and focus on high-value applications in foodservice. It says it also reflects the co-op's commitment to strong partnerships with global customers like McDonald's, and delivering consistent, high-quality dairy product to consumers around the world.
The site's processed cheese is now featured in McDonald's newest burger - the Big Arch - which launched in Australia on 16 July and in New Zealand on 22 October, following earlier rollouts in Europe and the US. The burger includes three slices of Eltham's cheddar cheese.
Kelvin Gray, operations manager at Eltham, says the team is proud to see their product showcased in such a high-profile way.
“It’s not every day you see three slices of our cheese in one burger – it’s a great showcase of the skill and care that goes into what we do here in Eltham. Knowing that our work in Taranaki is being enjoyed by consumers around the world is incredibly rewarding.”
The Eltham site has been producing cheese for McDonald’s for decades, and today its white cheddar slices are used in McDonald’s restaurants across Asia Pacific. This year, Fonterra has supplied millions of kilograms of cheese and other dairy products to McDonald’s, with New Zealand’s 170+ McDonald’s restaurants accounting for approximately 1.7 million kilograms.
The Eltham site has been producing cheese for McDonald’s for decades, and today its white cheddar slices are used in McDonald’s restaurants across Asia Pacific. This year, Fonterra has supplied millions of kilograms of cheese and other dairy products to McDonald’s, with New Zealand’s 170+ McDonald’s restaurants accounting for approximately 1.7 million kilograms.
Global Demand
Announced in August 2025, Eltham is upgrading its processed cheese lines to increase capacity for slice-on-slice (SOS) cheese, in response to growing demand from global customers like McDonald’s. The upgraded Individually Wrapped Slice line will see a new grinder (the machine that grinds up cheese prior to it being cooked), new blender and new cooker. Alongside this, two new cheese grinders are being installed on each of the SOS lines. The upgrade and installations are running on track, with commissioning of the lines scheduled for February 2026.
The site also continues to scale up its operations to meet rising global demand for Individually Quick Frozen Mozzarella (IQF). This will see an increase of approximately 7,000 metric tons in volume for the site once operational in June 2026. This expansion will enable the co-op to supply enough cheese for more than 40 million pizzas annually, reinforcing cheese as a key category in Fonterra’s high-value Foodservice channel.
Eltham’s cheese production is deeply connected to New Zealand’s dairy farming community. Milk from local farms is transformed into cheese that ends up in billions of meals globally.
With around 400 employees, Eltham is one of South Taranaki’s largest employers. Its expertise in processed cheese continues to evolve, helping shape the taste of global foodservice – one slice at a time.
