Synlait Milk secures future supply as farmer confidence grows

NEW ZEALAND  – Synlait Milk Limited, a major dairy company based in Canterbury, has achieved a key milestone in securing its milk supply for the coming years, boosting confidence in its financial recovery. 

The company announced that most farmers have withdrawn their cease notices, ensuring sufficient milk volumes for fiscal years 2026 and 2027. 

This development comes amidst rising competition in the region’s dairy market, signaling a positive shift for Synlait after a challenging period.

The company’s recent success follows a tough 2024, when it faced falling sales, a dispute with its largest customer, and significant debt. 

Synlait required an emergency loan and a financial rescue package from its two biggest shareholders to stay afloat. 

Now, with its milk supply stabilized, the company is showing signs of a turnaround. Meanwhile, Synlait is offering farmers a premium to withdraw their cease notices by May 2025, a move that has encouraged many to recommit. 

This strategy has strengthened farmer confidence and secured the company’s operational base.

“We’re pleased to see farmers standing by us as we work toward a stronger future,”  Synlait said.

The company’s efforts have paid off, with sufficient milk volumes now locked in despite competition from other dairy players in Canterbury. 

Synlait’s focus on rebuilding trust with its suppliers has been a critical step in its recovery plan.

Synlait returned to profitability in the first half of fiscal year 2025, posting a modest profit of US$4.8 million compared to a US$96.2 million loss the previous year. 

This financial improvement, combined with a 16% revenue increase to NZD 916.7 million, has fueled optimism about the company’s direction. 

The decision to secure future milk supply is seen as a foundation for sustaining this growth. Industry analysts have taken note of Synlait’s progress. 

“This is a significant achievement for Synlait, especially in a competitive market,” said Jonathan Snape from Bell Potter, who maintained a Hold rating on the company’s stock. 

The company’s shares have also seen an upward trend, reflecting investor confidence in its recovery. Synlait’s stock rose due to its strategic positioning and the securing of milk volumes.

Synlait, known for producing baby formula for A2 Milk and other dairy products through its Dairy Works subsidiary, is now better positioned to meet demand. 

With its supply chain stabilized and financial health improving, the company aims to maintain its role as a key player in New Zealand’s dairy industry. 

As competition grows, Synlait’s latest milestone marks a hopeful step forward.