THE first of the major milk processors to announce a step-up, Fonterra, produced a 15 cent per kilogram milk solids increase to the minimum milk price for the 2024/25 season in Australia during the week.
And they’ve now been joined by the Bega Group and Saputo Dairy Australia.
Fonterra ‘s increase boosts the weighted average milk price to $8.15 per kilogram milk solids.
Saputo’s 15c step-up increases the weighted average farmgate milk price to between $8.15 and $8.30 per kgMS for exclusive supply in the Southern milk regions (being Gippsland, South-West Victoria and South Australia, Northern region and Tasmania).
Bega’s increase is along the same lines.
But is it enough?
Speaking on ABC Country Hour on Wednesday, United Dairyfarmers of Victoria President Bernie Free says no.
“It’s a bit of the same thing from the three of them. Nobody's been creative or different. They just want to slide along and all be exactly the same and not show some leadership. Fifteen cents is not much of a step-up given the price on international markets that they all talk about, that we get compared to,” said Mr Free, noting that both Fonterra’s New Zealand price and the Global Dairy Trade prices were outstripping the price, including the step-ups in Australia.
“I believe that we should actually be above those two prices given the percentage of domestic product that we sell. And yet we're a long way behind those two figures.”
He said the processors needed to be giving better signals to dairy farmers and paying them their share of the premium that came from higher domestic sales.
But Daryl Hoey of Wonthaggi says it all helps.
“It was welcome. I wasn't really expecting it, but any increase is always being looked for throughout the seasons. Always good,” Mr Hoey said.
The Bega supplier said he didn’t know it was coming.
No, no, the factories keep those things pretty quiet these days. We knew Fonterra did, so, perhaps there was a bit of an expectation or pressure on the others. But no, I certainly wasn't expecting one this time of year.”
What’s it worth and what will you do with it?
“Probably around $20,000 for the year. So, it's not a small amount. Pay fertilizer bill at this time of the year, which are going to be pretty big this year.”
He noted the global prices were good as well, hopefully generating another step-up or two. And the seasonal conditions in South Gippsland?
Global market good?
“I think the season in South Gippsland would probably have to be one of the best ever. We had a pretty good autumn break and we’ve had just enough rain looks throughout the whole year so that grass growth has been phenomenal. Look, productions up, so it'd be pretty hard to script a better season.”
