Fonterra, Bega, Saputo Announce Christmas Milk Price Increase
Source: DairyNews.today
Major milk processors Fonterra, Bega Group, and Saputo Dairy Australia have announced step-ups in their minimum farmgate milk prices for the 2024/25 season, providing a boost to dairy farmers in Australia.
Fonterra led the charge, increasing its minimum milk price by 15 cents per kilogram of milk solids (kgMS), lifting its weighted average to $8.15 per kgMS. Shortly after, Bega Group and Saputo Dairy Australia followed suit with similar increases. Saputo’s step-up raises its weighted average farmgate milk price to between $8.15 and $8.30 per kgMS for its Southern milk regions, including Gippsland, South-West Victoria, South Australia, Northern regions, and Tasmania.
Industry Reaction Divided
The announcements have drawn mixed reactions from industry representatives and farmers.
United Dairyfarmers of Victoria President Bernie Free criticized the increases as insufficient. Speaking to ABC Country Hour, Free said, “Fifteen cents is not much of a step-up given the price on international markets that they all talk about.” He noted that both Fonterra’s New Zealand price and the Global Dairy Trade index were higher than the adjusted prices offered in Australia.
“We should be above those prices given the share of domestic product we sell, but we remain far behind,” Free added, calling for processors to provide stronger price signals and share the premiums from higher domestic sales.
Farmer Sentiment
Despite criticism, some farmers welcomed the move. Daryl Hoey, a supplier for Bega in Wonthaggi, expressed gratitude for the increase, saying it came as a pleasant surprise. “It’s always good to get a step-up, especially at this time of year. It was unexpected but appreciated,” he said.
Hoey estimated the increase would add about $20,000 to his annual income, which he plans to use for fertilizer expenses. “It’s not a small amount, and with the global market looking good, I’m hopeful for further step-ups,” he said.
Seasonal and Market Outlook
Favorable seasonal conditions in regions like South Gippsland have boosted production, with farmers reporting exceptional grass growth and optimal weather. “It’s probably one of the best seasons ever,” Hoey noted.
Global dairy markets remain strong, potentially setting the stage for additional price adjustments in the coming months. However, industry advocates continue to push for more competitive pricing that reflects both global benchmarks and domestic market conditions.
Industry Reaction Divided
The announcements have drawn mixed reactions from industry representatives and farmers.
United Dairyfarmers of Victoria President Bernie Free criticized the increases as insufficient. Speaking to ABC Country Hour, Free said, “Fifteen cents is not much of a step-up given the price on international markets that they all talk about.” He noted that both Fonterra’s New Zealand price and the Global Dairy Trade index were higher than the adjusted prices offered in Australia.
“We should be above those prices given the share of domestic product we sell, but we remain far behind,” Free added, calling for processors to provide stronger price signals and share the premiums from higher domestic sales.
Farmer Sentiment
Despite criticism, some farmers welcomed the move. Daryl Hoey, a supplier for Bega in Wonthaggi, expressed gratitude for the increase, saying it came as a pleasant surprise. “It’s always good to get a step-up, especially at this time of year. It was unexpected but appreciated,” he said.
Hoey estimated the increase would add about $20,000 to his annual income, which he plans to use for fertilizer expenses. “It’s not a small amount, and with the global market looking good, I’m hopeful for further step-ups,” he said.
Seasonal and Market Outlook
Favorable seasonal conditions in regions like South Gippsland have boosted production, with farmers reporting exceptional grass growth and optimal weather. “It’s probably one of the best seasons ever,” Hoey noted.
Global dairy markets remain strong, potentially setting the stage for additional price adjustments in the coming months. However, industry advocates continue to push for more competitive pricing that reflects both global benchmarks and domestic market conditions.
