Earlier today, the Commerce Commission published a draft report on Fonterra's FGMP calculation for the 2014/15 milk production season.
It is required to review Fonterra's FGMP calculation each year under the Dairy Industry Restructuring Act (DIRA) - legislation that allowed the merger of New Zealand Cooperative Dairy and Kiwi Cooperative Dairies to form Fonterra in 2001.
Fonterra ended the 2014/15 season with a FGMP of NZ$4.40 per kilogram of milk solids (kgMS).
In a statement, the Commerce Commission said Fonterra's calculations were “largely consistent with both the efficiency and contestability purposes of the DIRA.”
“Fonterra has made a significant effort to improve the transparency of its calculations and we have now resolved some outstanding issues from last year,” said Sue Begg, deputy chair, Commerce Commission.
“Most notably we can conclude its assumed energy and fixed asset costs are consistent with the purpose of the regime," she said.
A window for comments on the Commerce Commission’s draft report is open until September 1.
The final report will be published by September 15, it said.
In May 2014, Fonterra - the world's largest dairy exporter - announced an opening FGMP for the 2014/15 season of NZ$7.00.
The New Zealand dairy knocked a dollar off its initial estimate in July 2014, then reduced it to NZ$5.30 in September 2014 and NZ$4.70 in December 2014.
It further cut its forecast to NZ$4.50 per kgMS in April 2015, before settling on $4.40 the following month.
Fonterra announced an opening FGMP for the 2015/16 season, which began on June 1, of NZ$5.25 per kgMS.
It has since Fonterra slashed its forecast for the current season to NZ$3.85 per kgMS to account for the “imbalance” in supply and demand.