Fonterra lifted the lower end of its 2021 forecast earnings guidance on Thursday.
The dairy co-op narrowed its profit forecast to between 25 cents per share and 35 cents. That was up on its previous guidance of 20-35c per share.
Chief executive Miles Hurrell said although the company was still preparing its interim accounts, which would be released in March, it now had enough information to give more clarity on its earnings.
"That is why we have come out today with narrower forecast earnings range of 25-35 cents per share, which still reflects the usual uncertainties we face over the course of any given year," he said.
"Despite the challenges and flow-on effects of COVID-19, the team have remained committed and disciplined. There has been strong demand for the co-op's New Zealand milk and we've continued to get product to market."
Hurrell said the co-op expected its earnings performance to be heavily weighted to the first half of the financial year.
While a forecast farmgate milk price range of $6.90-$7.50 per kgMS was "great for farmers and the New Zealand economy", Hurrell said increased dairy prices through the first half of the year was putting pressure on the company's sales margins which "will be seen through the second half of the year".
"We will continue to focus on what is within our control that's staying on strategy and maintaining financial discipline.
"It's also about our teams going out every day in our markets around the world, proactively managing challenges in the global supply chain and delivering for our customers, farmer shareholders and unit holders."