Fonterra (ASX:FSF), the huge New Zealand-based dairy giant, might be on the retreat globally with a string of asset sales, but as far as the immediate outlook is concerned, it's quite upbeat.

Wednesday saw it reveal a slightly higher first estimate of its key farmgate milk price for the coming season, lift its earnings forecast for the current financial year, and add that it has seen a 'high volume of interest' in potential sale of consumer brands in Australia and New Zealand.

Earnings from continuing operations edged up 2% in the third quarter to $NZ1.01 billion, but there was a 6% drop in EBIT from those businesses to $NZ1.44 billion.

Its estimated earnings per share from continuing operations were 61 NZ cents, while reported earnings per share were 58 NZ cents.

Fonterra lifted its forecast for the 2024 financial year continuing operations' earnings range from 50-65 NZ cents per share to 60-70 NZ cents per share - that’s a possible 20% improvement.

In addition, the opening forecast farmgate milk price for the 2024-25 season was set at $NZ7.25-$NZ8.75 per kgMS, with a midpoint of $NZ8.

Fonterra's current season forecast farmgate milk price remained unchanged at a midpoint of $NZ7.80 per kgMS, with a narrowed range of $NZ7.70-$NZ7.90 per kgMS. Directors said the rise in third-quarter earnings was "driven by continued strong earnings across all three of the Co-op's product channels."

CEO Miles Hurrell says the Co-op's Foodservice and Consumer channels, in particular, had a strong third quarter with a lift in earnings compared to the same time last year.

The company noted that Global Dairy Trade (GDT) prices have risen in the past couple of months, back to levels seen around the start of this year.

“Our current season forecast Farmgate Milk Price midpoint remains unchanged at $7.80 per kgMS and as we are nearing the end of the season, we have narrowed the range to $7.70-$7.90 per kgMS.

“Looking to the 2024/25 season, milk supply and demand dynamics remain finely balanced and China import volumes have not yet recovered to historic levels.

“Given the early point in the season, the uncertainty in the outlook and ongoing risk of volatility in global markets, we are starting the season with a cautious approach. Our opening forecast range is $7.25-$8.75 per kgMS with a midpoint of $8.00 per kgMS,” says Mr Hurrell.

“Fonterra said its sales volumes were up slightly on last year by 1%, due to higher sales volumes in its Foodservice and Consumer channels.

“We also saw price relativities ease over the quarter, and we anticipate them to narrow further in Q4 as they return to more historic levels.

“Gross margins remain strong across all three channels as our in-market teams continue to drive pricing and volume. Foodservice and Consumer volumes are up 4% and 7% respectively year on year, with margins consistent with Q2," the CEO said.

And in an update of the major strategy switch announced several weeks ago, Hurrell said Fonterra has seen a lot of interest in its consumer and associated business (in Australia, NZ, and Sri Lanka).

“It’s still early days in this process, and we are also progressing work on our updated strategy and expect to share further detail over the coming months,” according to Mr. Hurrell.